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February sales beat forecast

Washington D.C. - In response to the end of the payroll tax holiday and higher gasoline prices, consumers quickly adjusted their spending, driving retail sales up enough to beat estimates in February - although sales of home furnishings took a hit during the month.

The National Retail Federation's February retail sales report shows sales excluding automobiles, gas stations and restaurants increased 0.7% seasonally adjusted from January and inched up 0.5% unadjusted year-over-year.

By segment, results varied - with some areas gaining and others missing sales. Furniture and home furnishing stores' sales, for example, decreased 1.6% seasonally-adjusted month-to-month and decreased 2.0% unadjusted year-over-year, while building material and garden equipment and supplies stores' sales increased 1.1% seasonally-adjusted and increased 0.9% unadjusted year-over-year.

"Retail continues to show its importance to the economy," explained Matthew Shay, NRF president and ceo. "That said, our consumer research consistently shows a cautious shopper that is making tough spending decisions based upon economic uncertainties, lower paychecks and higher prices for things such as gas. This is particularly true among those making $50,000 or less a year."

He warned that while retail sales numbers "indicate good momentum for the economy, consumers with less earning power may continue to face ongoing pressure and retail sales will encounter further challenges as sequestration takes full effect in March."

February retail sales, released today by the U.S. Department of Commerce, showed total retail and food services sales, which include non-general merchandise categories such as automobiles, gasoline stations, and restaurants, increased 1.1% seasonally adjusted month-to-month and increased 4.6% adjusted year-over-year.

"Consumers, once again, exceeded economists' expectations and estimates in February," said Jeff Kleinhenz, NRF chief economist. "It may be too early to measure the impact of the payroll tax hike and higher gasoline prices on consumer spending. However, this portends a good, but not great, first quarter for retailers as consumers continue to breathe life into the economy."

Other findings, by segment, include:

  • Clothing and clothing accessories stores' sales increased 0.2% seasonally-adjusted month-to-month and increased 0.4% unadjusted year-over-year;
  • Electronics and appliance stores' sales decreased 0.2% seasonally-adjusted month-to-month and decreased 3.2% unadjusted year-over-year;
  • General merchandise stores' sales increased 0.5% seasonally-adjusted month-to-month but decreased 4.7% unadjusted year-over-year;
  • Health and personal care stores' sales were flat seasonally-adjusted month-to-month and decreased 2.9% unadjusted year-over-year;
  • Nonstore retailers' sales increased 1.6% seasonally-adjusted month-to-month and increased 11.6% unadjusted year-over-year;
  • Sporting goods, hobby, book and music stores' sales decreased 0.9% seasonally-adjusted month-to-month but increased 0.6% unadjusted year-over-year.

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