Retail sales rose 1 percent last month, the Commerce Department reported Friday. Part of the gain reflected higher prices for gasoline. Still, excluding sales at gas stations, retail sales rose a solid 0.9 percent.
February's jump in sales followed a strong upward revision that showed a 0.7 percent increase in January. That was more than double the original estimate.
Sales totaled $387.1 billion, up 15.3 percent from the recession low reached in December 2008. A Social Security tax cut and rising employment will likely encourage consumers to spend more this year, although higher gas prices will cut into their disposable income.
“This is a very encouraging report,” said Paul Ashworth, chief US economist at Capital Economics. He said spending should be a strong 3 percent or more in the first three months of this year. This category is closely watched because it accounts for 70 percent of total economic activity.
The tax cut is “undoubtedly still providing a temporary boost,” Ashworth said. But he cautioned that higher energy prices would start affecting household budgets in the next month or two.
Auto sales led the February increase, rising 2.3 percent.
Dealers have been enjoying stronger demand in recent months as the economy improves and more people find jobs.
The major automakers offered discounts last month and that gave added momentum to sales. All the major car companies reported double-digit gains for February.
Higher oil prices also pushed sales up. Gas station sales climbed 1.4 percent, the biggest jump since December.
Better weather brought people back to department stores.
Sales rose 1 percent, a rebound from a 0.4 percent drop in January when winter storms kept people from shopping.
Online shopping, which had benefited from the bad weather in January, showed a 0.3 percent dip in February.
Sales at electronics and appliance stores rose 0.9 percent in February after falling 0.2 percent in January.
Sales at specialty clothing stores rose 0.8 percent. Sales at hardware stores bounced back in February, rising 0.6 percent after having fallen 1.3 percent in January, a reflection of the severe weather.
