WASHINGTON — U.S. retail sales climbed at the fastest rate in four months during February, but evidence surfaced that rising gasoline prices might weigh on consumers and the economy going forward.
U.S. retail and food services sales increased by 1.0 percent from the previous month to $387.12 billion, the Commerce Department said today. Most categories of merchants showed sales increases.
And sales in January rose more than first thought, with the government revising to a gain of 0.7 percent, up from an originally estimated 0.3 percent. Additional data Friday showed U.S. businesses raised inventories in January more than expected, a sign of confidence by companies in the economy.
February’s retail sales gain was the biggest since October, suggesting improvement in the jobs and stock markets have buoyed consumers. Yet the sales increase was less than the 1.2 percent expected on Wall Street.
And a separate report on Friday indicated a souring in the mood of the consumer. The Thomson Reuters/University of Michigan consumer sentiment index dropped to 68.2 in early March from the end-February reading of 77.5. The report also showed climbing inflation expectations among consumers.
Rising prices for food and energy helped boost the value of sales in February by retailers of those products. Yet economists fear the higher costs could hurt spending going forward.
“Should gas prices remain elevated for an extended period as anticipated by many analysts, consumers are likely to have to trim other spending,” said Jim Baird, chief investment strategist at Plante Moran Financial Advisors.
