Retail Sales Inch Up 0.6% in February

Overall U.S. retail sales rose in February, but only auto dealers and department stores contributed to the increase.

The Commerce Department said Thursday that retail sales rose 0.6% to a seasonally adjusted $327.2 billion last month, in line with Wall Street economists’ expectations. But sales excluding autos were unexpectedly flat compared with January, defying projections of a 0.5% gain.

Taking some of the sting out of the February retail sales data were revisions to the January numbers. January retail sales were revised up to a 0.2% increase, while sales excluding autos rose 1.2%. Previously, January sales had been reported down 0.3% overall and up a smaller 0.9% without autos.

Economists closely watch retail sales because they make up a major portion of consumer spending, which accounts for about two-thirds of total U.S. economic activity.

The 2.7% gain in February auto sales was the biggest advance since March 2003, while a 1.2% gain in department store purchases was the biggest since July. Sales of electronics and appliances also rose.

However, sales at furniture stores, sporting goods outlets, bookstores and gas stations were all down in February.

Analysts had expected shoppers to put their tax refund checks to work in February. Many filers will be receiving a bigger check from Uncle Sam this spring as a result of tax cuts enacted last year. According to Internal Revenue Service data, about 46 million refunds had been processed through March 5, with the average size about $2,182, up 4.4% from refunds in the same period of 2003.

In another report Thursday, the Labor Department said prices of imported goods rose 0.4% in February, their fifth straight gain. Export prices were up 0.6%.