Sales at U.S. retailers jumped in February by the most in five months, showing broad-based gains from autos to building materials, underscoring yet another hopeful sign of a strengthening economy.
Total retail sales increased 1.1 percent, the Commerce Department said Tuesday, after an upwardly revised gain of 0.6 percent in January.
Economists polled by Thomson Reuters had projected a 1.0 percent gain, following a previously reported 0.4 percent rise in January.
The government's monthly retail sales figures are a closely watched economic barometer, because consumer spending accounts for about 70 percent of U.S. economic activity.
Sales were boosted by a 1.6 percent gain in sales of motor vehicles, reflecting growing consumer confidence.
The auto industry is now in its third year of recovery from a severe slump that led to the bankruptcies of General Motors Co. (NYSE:GM) and Chrysler Group LLC in 2009.
Despite higher gas prices, U.S. auto sales rose nearly 16 percent in February and the annual sales rate leapt to a four-year high of 15.1 million, helped by a strong sales gain at GM (NYSE: GM), Chrysler and Ford Motor Co. (NYSE: F). The last time U.S. monthly sales surpassed 15 million vehicles was in February 2008, as the recession was just beginning.
Spending in other key categories also came in strong.
February apparel sales jumped 1.8 percent, with sales at chains like Macy's Inc. (NYSE:M) and the Gap Inc. (NYSE:GPS) last month topping analysts' estimates.
Macy's reported a 4.6 percent rise in same-store sales, ahead of the 3.5 percent forecast by Wall Street. Gap said its February same-store sales rose 4 percent, while analysts had expected the retailer to report a fall of 1.4 percent.
Gasoline stations saw a 3.3 percent surge, while sales in the building material and garden equipment sector rose 1.4 percent.
Core retail sales, which exclude autos, gasoline and building materials, rose 0.9 percent in February. That's better than economists' forecast of a 0.7 percent rise.
The Labor Department's latest snapshot of the job market showed employers have been hiring more in recent months, with 227,000 net new jobs added in February. The unemployment rate now stands at 8.3 percent, down from 9.1 percent as recently as August. Initial jobless claims are hovering near a four-year low.
According to data released by the Federal Reserve, household debt rose for the first time in 3 1/2 years during the fourth quarter, which is another indication that Americans were more comfortable borrowing money and further loosening their purse strings.