Bloomberg News

Retail Sales in U.S. Probably Rose in February, Lifted by Autos

March 13, 2012

A Chrysler Jeep SUV on a delivery truck at the Hollywood Chrysler Jeep sales lot in Hollywood, Florida. Photographer: Joe Raedle/Getty Images

A Chrysler Jeep SUV on a delivery truck at the Hollywood Chrysler Jeep sales lot in Hollywood, Florida. Photographer: Joe Raedle/Getty Images

Retail sales in the U.S. probably rose in February by the most in five months, spurred by the strongest demand for automobiles since 2008, economists said before a report today.

The 1.1 percent rise would follow a 0.4 percent gain in January, according to the median forecast of 81 economists surveyed by Bloomberg News. Excluding autos, purchases may have climbed 0.7 percent.

Sales at chains like Gap Inc. (GPS) and Target Corp. (TGT) last month beat analysts’ estimates, a sign an improving job market is bolstering consumer spending, the biggest part of the economy. A pickup in payrolls accompanied by limited wage gains may not be enough to satisfy Federal Reserve officials, who today will probably reaffirm a commitment to keep interest rates low.

“The labor market is growing and credit is getting better, and these are two big sources for consumer spending,” said Millan Mulraine, a senior U.S. strategist at TD Securities in New York. “I don’t think the Fed will declare victory yet because the economy is still not close to where they want it to be.”

The Commerce Department will release the sales report at 8:30 a.m. in Washington. Economists’ estimates ranged from gains of 0.5 percent to 2.1 percent.

At 10 a.m., another report from the Commerce Department may show business inventories climbed 0.5 percent in January, following a 0.4 percent gain the prior month, as sales improved, according to the survey median.

Hiring Pickup

Employers boosted payrolls more than forecast in February, capping the best six-month streak of job growth since 2006. The 227,000 increase followed a revised 284,000 gain in January that was bigger than first estimated, the Labor Department reported on March 9. The jobless rate held at a three-year low of 8.3 percent.

Cars last month sold at the fastest pace in four years, led by Chrysler Group LLC and a surprise gain from General Motors Co. (GM) Light-vehicle sales accelerated to a 15 (SAARTOTL) million annual rate, the strongest since February 2008, according to Ward’s Automotive Group.

“There are a number of factors that are helping release this pent-up demand,” Don Johnson, vice president of GM’s U.S. sales, said on a March 1 conference call with analysts. “They include stronger employment, good credit availability, and both of those are leading to improving consumer sentiment.”

The retail sales data, which aren’t adjusted for prices, will also reflect increasing gasoline costs. Regular (3AGSREG) fuel in February averaged $3.56 a gallon, or 18 cents more than January, according to AAA, the nation’s biggest auto organization. It’s climbed further this month, reaching $3.80 on March 11, the highest since May.

Unseasonably Warm

Gap, the largest U.S. apparel chain, and Target, the country’s second-largest discount retailer, were among merchants whose February sales gains at stores open at least a year exceeded analysts’ average estimates. Unseasonably warm weather may have helped to spur demand for spring merchandise.

The average temperature was 38.2 degrees Fahrenheit (3.4 Celsius) last month, 3.6 degrees warmer than the 20th century average and the 17th warmest February in 118 years.

Investors have driven up retailers’ shares as the job market heals. The Standard & Poor’s Supercomposite Retailing Index (S15RETL), which includes Gap and Macy’s Inc., has climbed 15 percent this year through yesterday, compared with a 9 percent advance for the broader S&P 500. (SPX)

Fed policy makers may reiterate a plan to keep interest rates low at least through late 2014 after meeting later today. Chairman Ben S. Bernanke, in his semiannual monetary policy report to Congress, said maintaining monetary stimulus is warranted even with employment gains and a lower jobless rate.

While there are “some positive developments in the labor market,” Bernanke told lawmakers on March 1, “the pace of expansion has been uneven.” The rise in gasoline prices “is likely to push up inflation temporarily while reducing consumers’ purchasing power,” he said.

                         Bloomberg Survey

====================================================
                            Retail   Retail Business
                             Sales ex-autos     Inv.
                              MOM%     MOM%     MOM%
====================================================

Date of Release              03/13    03/13    03/13
Observation Period            Feb.     Feb.     Jan.
----------------------------------------------------
Median                        1.1%     0.7%     0.5%
Average                       1.1%     0.7%     0.5%
High Forecast                 2.1%     1.7%     0.6%
Low Forecast                  0.5%     0.2%     0.3%
Number of Participants          81       75       49
Previous                      0.4%     0.7%     0.4%
----------------------------------------------------
4CAST                         0.9%     0.7%     ---
ABN Amro                      1.1%     ---      ---
Action Economics              0.9%     0.7%     0.6%
Aletti Gestielle              1.1%     0.8%     ---
Ameriprise Financial          0.9%     0.7%     0.6%
Banca Aletti                  1.0%     0.8%     ---
Banesto                       1.0%     ---      0.6%
Bank of Tokyo- Mitsubishi     1.1%     0.7%     0.4%
Barclays Capital              1.2%     0.8%     0.5%
BBVA                          0.9%     0.5%     0.5%
BMO Capital Markets           1.2%     0.8%     0.6%
BNP Paribas                   1.3%     0.8%     ---
BofA Merrill Lynch            0.9%     0.7%     ---
Briefing.com                  1.8%     1.2%     0.6%
Capital Economics             1.2%     0.8%     0.5%
CIBC World Markets            1.2%     1.1%     ---
Citi                          1.2%     0.7%     0.4%
ClearView Economics           1.0%     0.5%     0.5%
Comerica                      0.9%     0.6%     0.6%
Commerzbank AG                1.2%     0.8%     0.5%
Credit Suisse                 1.1%     0.9%     0.5%
Daiwa Securities America      1.2%     1.0%     ---
Danske Bank                   1.0%     0.7%     ---
DekaBank                      0.9%     0.6%     0.6%
Desjardins Group              0.8%     0.6%     0.4%
Deutsche Bank Securities      1.1%     0.9%     0.4%
Deutsche Postbank AG          1.5%     1.0%     ---
DZ Bank                       0.8%     0.5%     ---
Exane                         1.0%     0.5%     ---
Fact & Opinion Economics      1.2%     0.6%     0.5%
First Trust Advisors          2.1%     1.5%     0.5%
FTN Financial                 1.1%     0.8%     ---
Goldman, Sachs & Co.          1.3%     0.7%     ---
Helaba                        1.1%     0.7%     0.5%
Herrmann Forecasting          1.1%     0.8%     0.5%
High Frequency Economics      1.3%     0.5%     0.6%
HSBC Markets                  0.8%     0.9%     ---
IDEAglobal                    1.0%     0.5%     0.6%
IHS Global Insight            1.2%     0.9%     0.4%
Informa Global Markets        1.2%     0.9%     0.3%
ING Financial Markets         1.2%     0.7%     0.5%
Insight Economics             1.6%     1.0%     0.5%
Intesa Sanpaulo               1.2%     0.6%     ---
J.P. Morgan Chase             1.1%     0.7%     0.6%
Janney Montgomery Scott       1.6%     1.2%     0.6%
Jefferies & Co.               1.2%     0.8%     0.6%
Landesbank Berlin             0.7%     0.4%     0.5%
Landesbank BW                 1.2%     ---      ---
Maria Fiorini Ramirez         1.5%     1.0%     0.6%
MET Capital Advisors          0.7%     ---      ---
Mizuho Securities             0.5%     0.5%     0.4%
Moody’s Analytics             0.9%     0.5%     0.5%
Morgan Keegan & Co.           0.6%     0.6%     0.5%
Morgan Stanley & Co.          1.3%     1.0%     0.6%
National Bank Financial       0.8%     0.6%     ---
Natixis                       0.8%     0.5%     ---
Nomura Securities             1.0%     0.7%     ---
Nord/LB                       0.7%     0.5%     ---
OSK Group/DMG                 1.2%     0.7%     ---
O’Sullivan                    1.2%     0.9%     0.5%
Parthenon Group               1.4%     0.6%     0.6%
Pierpont Securities           1.1%     0.7%     ---
PineBridge Investments        0.8%     0.3%     0.4%
PNC Bank                      1.0%     0.6%     0.3%
Raiffeisenbank International  1.0%     0.6%     ---
Raymond James                 0.7%     0.6%     0.4%
RBC Capital Markets           1.4%     0.8%     ---
RBS Securities                1.1%     0.7%     ---
Scotia Capital                1.0%     0.7%     ---
SMBC Nikko Securities         0.6%     0.2%     ---
Societe Generale              2.0%     1.7%     0.4%
Standard & Poor’s             0.9%     0.7%     0.6%
Standard Chartered            1.1%     ---      ---
Stone & McCarthy Research     1.1%     0.8%     0.5%
TD Securities                 1.3%     0.6%     0.4%
UBS                           1.3%     0.9%     0.5%
University of Maryland        0.7%     0.5%     0.5%
Wells Fargo & Co.             0.9%     0.7%     0.6%
WestLB AG                     1.0%     0.7%     ---
Westpac Banking Co.           1.2%     ---      ---
Wrightson ICAP                1.6%     1.1%     0.5%
====================================================

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net


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