Business Breaking News

The Canadian Press - ONLINE EDITION

US retail sales expected to post slight gain in February

By: The Associated Press

Tuesday, Mar. 12, 2013 at 2:03 AM | Comments: 0

WASHINGTON - Americans likely spent cautiously in February at retail businesses, balancing a surge in hiring against higher taxes and gas prices.

Economists forecast that retail sales rose 0.2 per cent in February from January, according to a survey by FactSet. That would be only slightly better than January's 0.1 per cent increase.

The Commerce Department will release the report at 8:30 a.m. EDT Wednesday.

The retail sales report is the government's first look at consumer spending, which drives about 70 per cent of economic activity. A private survey of major retailers released last week suggests that consumers boosted spending last month but at a slower pace than January.

Some of the anticipated increase likely went to cover higher gas prices. The national average price for a gallon of gas went from $3.42 on Jan. 31 to $3.78 on Feb. 28.

Still, any gain would indicate that Americans kept spending in February despite an increase in Social Security taxes that has lowered take-home pay this year for anyone collecting a paycheque. Someone earning $50,000 has about $1,000 less to spend in 2013. A household with two high-paid workers has up to $4,500 less.

Consumers may be able to absorb higher taxes if employers continue hiring and increasing wages.

The economy added 236,000 jobs in February, driving the unemployment rate down to 7.7 per cent, its lowest level in more than four years. The gains signal that companies are confident enough in the economy to intensify hiring even in the face of tax increases and government spending cuts.

Since November, employers have added an average of 205,000 jobs a month, up from 154,000 a month in the previous four months. The hiring spree has been fueled by steady improvement in housing, auto sales, manufacturing and corporate profits, along with record-low borrowing rates.

An improving in job market has also helped lift consumer confidence. And if it continues, it could provide a spark to growth after a dismal fourth quarter of 2012.

Many analysts believe the U.S. economy will grow a modest 2 per cent this year. While job gains should help provide some momentum, growth will likely be held back by uncertainty about the federal budget, higher Social Security taxes and across-the-board government spending cuts that kicked in March 1.

Rate this
This article has not yet been rated.

We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

You can also register and/or login to the site and join the conversation by leaving a comment.

Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Comments

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Comment

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.