The spring is finally around the corner for retail sales, a sign that the economy is showing a mild improvement.

Retail sales in February saw a seasonally adjusted increase of 0.3 percent (excluding the volatile auto sector) from the previous month, better than economists’ forecast of 0.2 percent. Sales totaled $427.2 billion, 1.5 percent above the same month a year ago. The increase came as good news after two months of straight decline including January of 2014 that saw a disappointing drop of 0.6 percent. Last December sales showed a decrease of 0.1 percent.


“The two months of decline was a combination of weather and the slow down of the housing market that affected the economy,” said Ryan Wang, economist for HSBC Security Inc. “But we will see in the future a stronger growth in consumers’ spending compared to 2013.”

Sporting goods, hobby, book and music stores drove the sales with a huge increase of 2.5 percent along with furniture and home furniture stores, which rose 0.4 percent, and non-store retailers and health and personal care stores that both increased 1.2 percent.

“I see that weekends are more crowded in the store,” said Peter Kaye, manager at Bleecker Street Records. The 2013 was a pretty good year for the store, and Kaye is optimistic about the future. “I have very good expectations for the 2014,” he said. “This is a great business to be in at the moment.”


Some national retail chains also reported good sales. Costco Wholesale, for the four-week ended on March 2nd, reported a net sale of $7.90 billion, an increase of four percent from the $7.58 billion during the same period last year.

Even the motor vehicle sector (that is excluded) did well: it rose 0.3 percent. And auto companies are optimistic about the fact that consumers’ demand will improve. “Despite a slower start in 2014 than most people expected, we look forward to a very successful year, backed by plenty of new products and what should be the strongest GDP growth since the end of the recession,” said in a statement Kurt McNeil, U.S. vice president of Sales Operation at General Motors.

But the unusual winter with freezing temperatures did affected the food service and drinking places sector that saw a modest 0.3 percent increase. “February was a little bit off because the cold days were a disaster,” said Lorenzo Baricca, manager of Tarallucci e Vino Wine Bar in the Lower East Side, Manhattan. But the bar compensated the loss with very good days. “In general our sales were good, like the ones in 2013,” Baricca said.

Miscellaneous store retailers with a decrease of 0.9 percent slow down the February retail sales, along with food and beverage stores and electronic and appliance stores that both drop 0.2 percent, and general merchandise stores that declined 0.3 percent.

As other indicators show, the economy activity in February was not bad. According to the Labor Department, jobless claims (which is a good measure to read the labor market situation) fall to the lowest level since last November. In fact, the number of people that applied for unemployment benefits unexpected drop by 9,000 to 315,000 in the week ended in March 8th, while economists instead forecasted 330,000. This echoes with the number of people that are under jobless benefits: the number decreased by 48,000 to 2.86 million in the week that ended on March 1st, which is the lowest level since last December.

Another significant thermometer to understand the health of the economy is the consumers’ confidence that at the end of February rose to 81.6 because of shoppers’ optimism about the overall economy.

The job market in February was stronger than forecasted and saw 175,000 jobs created, while economists were expecting fewer jobs because of the cold weather. (The most affected sector was the construction area due to the weather: it added only 15,000 jobs).

The February’s numbers are a quite good signal of a better and rebound economy, in comparison to the 113,00 jobs added in January and a disappointing 74,000 added in December.

But the unemployment still remains too high: it went up to 6.7 percent from 6.6 percent. The retail sales increase in February, according to Kim Fraser, economist at BBVA Compass Bancshares Inc., is not a sign that things are back to normal.










Comments are closed.