We Are Sunshine

Feb. Sales Gains Stoke Optimism

Wednesday, March 14th, 2012

Retailers looking for strong signs that consumers are spending got another one this week, as the Commerce Department reported that retail sales in February increased 1.1 percent over 2011 — including strong gains in automobile purchases.

“February sales at U.S. retailers jumped at the fastest pace in five months and January’s lackluster sales were revised higher, showing that consumers remain willing to spend as the economy appears to pick up steam,” reported on Tuesday, noting that increases in auto purchases show that consumers are willing to start loosening up purse-strings for major purchases.

“Earlier this month when retailers posted same-store sales results for February, more than 80% beat expectations,” The Wall Street Journal’s MarketWatch reported on Tuesday. “In all, among 18 retailers that have reported their results, sales rose 6.5%, beating estimates by 3 percentage points and marking the industry’s best performance since June, according to Retail Metrics.”

The MarketWatch report acknowledged that higher gas prices contribute to increases in sale, but that there are other factors in play as well. “The pleasant weather, which curbed spending on seasonal merchandise like salt and shovels, likely kept people more optimistic and open to spending on spring items. And we also didn’t see widespread closures due to inclement weather like we did last year. …The robust retail sales results come on the heels of an upbeat jobs report on Friday, which showed the best U.S. employment growth in 12 years, capping off about six months (of job growth).”

At the same time, a New York Times/CBS News poll showed that 75 percent of Americans believe the financial picture ranges from “fairly bad” to “very bad” even if a majority believe things are getting better, MarketWatch reported.

“Still, consumers showed last month that they were willing to spend more on cars, clothes and dining out, even as gas prices increased,” MarketWatch reported. Their report quotes Wells-Fargo Securities Senior Economist Mark Vitner saying, “Ordinarily, rising gas prices take a toll on consumer confidence. But so far most measures of consumer sentiment continue to rise, as equity markets remain strong and the labor market continues to improve.”

A poll released earlier this week showed that 58 percent of tanning businesses say their financial performance for the first two months of 2012 was better than 2011.

Click here to read the MarketWatch report.

Click here to read the report.

Click here to read the poll.