WASHINGTON — Retail sales for the month of February rose by 1.1% seasonally adjusted month to month, according to figures released Wednesday by the Department of Commerce.
The newly released figures include nongeneral merchandise categories, such as automobiles, gas stations and restaurants; excluding those, sales rose 0.7%, while rising 0.5% unadjusted year over year. The National Retail Federation noted that sales beat estimates as consumers adapted and adjusted spending in response to higher gas prices and the payroll tax increase.
"Retail continues to show its importance to the economy," NRF president and CEO Matthew Shay said. "That said, our consumer research consistently shows a cautious shopper that is making tough spending decisions based on economic uncertainties, lower paychecks and higher prices for things, such as gas. This is particularly true for those making $50,000 or less a year. While retail sales numbers indicate good momentum for the economy, consumers with less earning power may continue to face ongoing pressure, and retail sales will encounter further challenges as sequestration takes full effect in March."
Health and personal care stores' sales were flat seasonally adjusted month to month, and decreased 2.9% unadjusted year over year, while general merchandise stores sales saw a 0.5% increase adjusted month to month and a 4.7% decrease unadjusted year-over-year.
Guggenheim Securities analyst John Heinbockel noted in a report that overall retail sales, excluding cars and fuel, increased 4% in February, flat compared with January but below the 4.6% increase in February 2012.
"In such a moderating growth environment, we have an ongoing preference for more defensively positioned retailers, those with more consumables-oriented business mixes and average to below-average valuation levels," Heinbockel wrote, adding that Guggenheim would continue encouraging the buying of dollar store and pharmacy retail stocks, with the idea that both channels would continue generating above-average profit growth beyond the first quarter.