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February retail sales surpass expectations

national retail federationDespite an increase in payroll taxes in January and rising gasoline prices, retail sales in February surpassed expectations, rising 0.7 percent from January and 0.5 percent year-over-year.

“Retail continues to show its importance to the economy,” National Retail Federation President and CEO Matthew Shay said. “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. 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.”

Data released by the U.S. Department of Commerce last month revealed that February retail and food service sales, which include automobiles, gas stations and restaurants, increased by 1.1 percent month-to-month and increased 4.6 percent year-over-year.

“It may be too early to measure the impact of the payroll tax hike and higher gasoline prices on consumer spending,” NRF Chief Economist Jack Kleinhenz said. “However, this portends a good, but not great, first quarter for retailers as consumers continue to breathe life into the economy.”

Sales at building material and garden equipment stores, clothing and accessory stores, general merchandise stores and non-store retailers increased, while sales at electronics and appliance stores, furniture and home furnishing stores, as well as sporting goods, hobby, book and music stores, decreased.

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