February retail sales show sustained growth, says Commerce and NRF
March 11, 2011
Retail sales continued their solid momentum with February data showing sequential and annual growth, according to data from the United States Department of Commerce and the National Retail Federation (NRF).
February sales, which include non-general merchandise like automobiles, gasoline, and restaurants, were $387.1 billion for a 1.0 percent increase from January and an 8.9 percent increase over February 2010, according to Commerce. Total retail sales for the December 2010 through February 2011 period were up 8.2 percent year-over-year, and Commerce revised the December 2010 to January increase from 0.3 percent to 0.5 percent. February represents the eighth straight month of increased retail sales, according to Commerce data, and is the highest month for retail sales since November 2007.
February’s 1.0 percent gain is the largest recorded by Commerce in the last four months.
And the NRF reported that February retail sales, which exclude automobiles, gas stations, and restaurants, were up 0.6 percent from January on a seasonally-adjusted basis and up 4.2 percent unadjusted year-over-year.
“February retail sales are in sync with evidence of the expanding economy,” said NRF Chief Economist Jack Kleinhenz in a statement. “While February is typically a slow month for retailers, consumers showed their spending power, though it’s too soon to tell what type of impact the spike in gasoline prices will have on consumers this spring.”
Shippers and carriers have told LM that with retail sales showing sustained growth for eight consecutive months that it is possible freight transportation volumes will be more in sync with retail numbers, when it comes to both sets of data growing.
But despite this growth pattern, retail sales numbers—and freight volumes—remain below pre-recession levels, but there is a feeling of optimism that things will continue to improve regarding freight data, especially retail-oriented freight.
This appears to be happening to some degree already, according to Ryan Daube, President and CEO of AFN Worldwide, a non asset-based 3PL in Chicago.
“The market is as tight as it has ever been in February since we have been in business,” said Daube. “There is no question that it is exploding right now, in the sense that demand is growing.”
FTR Associates Managing Director and Senior Consultant Noel Perry said on a recent Webcast hosted by his firm that the economy is entering a period of consumption, which includes both services and goods, and he added that retail sales are growing at a stronger level than they did during the 2003-2004 economic recovery.
While retail sales showed forward progress in February, oil and gas prices have gone up significantly in recent weeks, which could potentially hinder future retail sales numbers, as money that consumers may spend could shift towards gasoline expenses, as well as potentially change consumer buying patterns.
This was evident in data released today by Thomson Reuters and the University of Michigan which showed that U.S. consumer sentiment declined in March, according to a MarketWatch report. Their data found that the consumer sentiment levels fell to 68.2 in March from 77.5 in February, marking its biggest decline since the onset of the financial crisis in September 2008.
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