Signs of economic growth continued to surface as retail sales in the U.S. showed an increase in February that was greater than expected.
In the most recent report issued by the Department of Commerce, sales rose 1.1 percent overall, while “core” sales (which do not include automobiles, gasoline, and construction materials) rose four tenths of a percent. In addition to the rise in consumer spending, both jobs and manufacturing continued their steady climb.
This is the second consecutive month in which core sales have increased, a good sign that the recovering economy is steadily building momentum. It is also a strong indicator that consumer spending will continue at least through the remainder of the first quarter, matching or surpassing the increase shown at the end of the fourth quarter 2012.
In addition, automobile sales grew by over one percent, despite the increase in gasoline prices (which contributed to the increase in sales receipts at gasoline stations). Sales of home building and related materials also showed a significant increase, pointing towards recovery in the housing market.
The strongest signs that this recovery will continue is that these increases occurred despite the loss of tax cuts and increases in tax rates.
The limited economic growth of the first three quarters of last year was cause for concern among economists, but the surprising increase in the fourth quarter and the continued growth of core sales in the first two months of this first quarter is causing many to revise their forecasts and predictions now support continued improvement in the economic picture.
Reference:
Reuters. “Consumers Still Strong, Just Keep on Spending” CNBC, 3/13/13.
