Americans boost their retail spending
WASHINGTON — Americans spent only slightly more last month at retail stores compared with January, a sign of consumer caution despite rising optimism about the economy.
The Commerce Department said Wednesday retail sales ticked up a seasonally adjusted
0.1 percent in February, after a much bigger gain of 0.6 percent the previous month. January’s gain was revised higher.
The figures suggest that strong job gains this year, near record-high stock prices and decent pay gains haven’t yet lifted spending. But last month’s sluggish pace could prove temporary.
Refund delays: Economists note that spending was likely held back by delays in tax refund payments. A new law has required tougher scrutiny of a tax credit claimed by lower-income taxpayers. Wal-Mart said last month that the delay had slowed sales at its stores in February. Other retailers have reported similar concerns.
Yet tax refunds have started to flow this month, which could trigger a rebound.
Economists were encouraged by the upward revisions to January’s sales data, which point to potentially faster growth in the first three months of the year.
Sales rose in February at furniture stores and home and garden centers. But they fell sharply at electronics and appliance stores.
Sales also fell at gasoline stations, though that mostly reflects lower prices. Clothing stores, sporting goods retailers and department stores also all reported lower sales.
There are several additional factors that could drive spending higher in the months ahead. Consumer confidence soared to its highest level in more than 15 years in February, according to the Conference Board, a business research group.
Hiring and average hourly pay growth have picked up since the new year. Americans’ finances are in better shape. Yet the boost in confidence might not be broadly shared. That could limit any spending that might result. For Americans younger than age 35, who are less likely than older age groups to own a home or stocks, confidence actually fell last month.