Market news – Retails sales spike in February.

Released on 3/11/2011 8:30:00 AM For Feb, 2011

	Prior	Consensus	Consensus Range	Actual
Retail Sales – M/M change	0.3 %	1.0 %	0.1 % to 1.5 %	1.0 %
Retail Sales less autos – M/M change	0.3 %	0.7 %	0.3 % to 1.3 %	0.7 %

Highlights
Retail sales spiked in February on higher auto sales and on higher gasoline sales. But other components were mostly robust. And we got a large upward revision to January. Overall retail sales surged 1.0 percent, following a revised 0.7 percent boost in January and a revised 0.6 percent increase in December. The February posting matched analysts’ expectation for a 1.0 percent jump. January and December had previously been estimated to be up 0.3 percent and 0.5 percent, respectively. Excluding autos, sales advanced 0.7 percent, following a 0.6 percent gain in January. A notable part of this increase was price related on higher gasoline prices. The median market forecast called for a 0.7 percent increase. Nonetheless, sales excluding autos and gasoline improved a strong 0.6 percent, following a 0.5 percent rise in January.

The February boost in sales was led by a 2.3 percent jump in sales of motor vehicles & parts with gasoline sales up 1.4 percent. Nearly all other major components were quite robust. Other notably strong components were sporting goods, hobby, book & music stores, up 1.3 percent, and food services & drinking places, up 1.2 percent. The latter is especially encouraging as it is a very discretionary category. Even the price depressed electronics component made a 0.9 percent comeback. The weakest major category was the housing-depressed furniture & home furnishings category, down a monthly 0.8 percent.

Overall retail sales on a year-ago basis in February rose to 8.9 percent from 8.1 percent the month before. Excluding motor vehicles, sales were up a year-ago 6.0 percent, compared to 6.4 percent in January.

Despite price effects, the latest retail sales numbers reflect a strong showing by the consumer. The February numbers plus upward revisions will have economists revising their estimates for first quarter GDP but his time it will be upward. Equity markets firmed a bit on the upward revisions but remained negative over concern about the economic impact of the earthquake in Japan and ensuing tsunami.