Small Gain in Retail Sales in February

U.S. retail sales rose less than expected in February, signaling that the economy probably is moving forward but not at a runaway pace.

Retail sales edged up a seasonally adjusted 0.3% last month to $296.41 billion, the Commerce Department said, reversing a matching 0.3% drop in January. Economists in a Reuters survey had forecast a 0.9% gain for February.

“We are on line for modest consumer spending in positive territory in the first quarter, but not the 6% we saw in the fourth quarter,” said Tim O’Neill, chief economist at Bank of Montreal/Harris Bank in Toronto. “Consumers are not on holiday, but we are not seeing a continuation of that very strong surge from the fourth quarter.”

Sales excluding automobiles rose 0.2% in February after a 1.2% surge in the prior month. Sales of vehicles and parts rose 0.4%.

Separately, the National Bureau of Economic Research, an academic group that dates recessions, signaled it may be moving closer to formally declaring that a recovery is underway in the economy.

The NBER, in a memo on its Web site, cited signs that the decline in economic activity that began last year “may be coming to an end.”

The NBER ruled in November that a recession began in the economy last March. Its decisions on the dates of business cycles usually occur with a time lag of several months.

Many private economists, joined by Federal Reserve Chairman Alan Greenspan, believe that the recession is over. Greenspan said Wednesday that he saw signs the economy was “beginning to firm.” But he forecast only a gradual recovery in business investment, which has been hit much harder during the recent downturn than consumer spending.

One of the strongest categories in the retail sales report was sales at furniture and home-furnishing stores, which climbed 1.5% in February after a 0.3% rise in January. The gain was consistent with a trend of robust home sales as new home buyers typically spend heavily on furnishings.

Sales at electronics and appliance stores were up 1.1%, bouncing back from a 3.2% drop in the prior month.

The slight 0.4% rise in vehicles and parts sales in February came after a plunge of 4.6% the previous month.

The sharp January decline came on the heels of a huge car-buying spree in late 2001 which had been fueled by zero-percent financing incentives.

Clothing sales slowed from the heady pace they saw in January. Purchases at clothing stores eased 0.1% in February after a 1.4% rise in January.

Three retailers reported earnings Wednesday.

Ross Stores Inc.’s fiscal fourth-quarter profit rose 10% as the retailer of low-price clothing and accessories sold more merchandise to customers looking for bargains in the recession. Net income rose to $50 million, or 62 cents a share, as sales rose 8.9% to $848.4 million.

Ross was among U.S. retailers that benefited as the recession and job cuts drove consumers to shop for holiday and winter goods at stores with lower prices.

Chief Executive Michael Balmuth added more brand names, a better balance of women’s career and casual clothes and a wider variety of home goods, analysts said.

Talbots Inc.’s fourth-quarter profit fell 1.5% as the women’s and children’s clothing retailer sold less merchandise at full price. Net income dropped to $32.5 million, or 53 cents a share; sales declined 8.4% to $433.2 million.

Foot Locker Inc., the biggest U.S. athletic-shoe and clothing retailer, reported fourth-quarter profit of $36 million, or 24 cents a share, compared with a loss of $288 million, or $2.06, a year earlier. Sales fell 8% to $1.16 billion.