Retail Sales Up in February, Surprising Economists

Retail sales rose in February despite the bad weather, surprising the economists (and they are often surprised) who expected a decline.

Sales for the month climbed 0.3 percent, the Commerce Department reported. That may not sound like much, but it's 3.9 percent better than February 2009 and a jolt to some on Wall Street who thought the sales rate would be in negative territory.

"The consumer continues to come out of its shell after the shell-shock of the recession," T. Rowe Price analyst Alan Levenson told the New York Times. "Employment is falling more slowly, wages are growing modestly, and hours worked are expanding, giving a lift to incomes."

Shell-shocked consumers can be forgiven puzzlement over the numbers and reports, which occasionally seem in conflict. For instance, when the rate of new sales contracts for the purchase of existing homes dropped in January, some blamed snowstorms in the eastern half of the country. Yet the February snows apparently did not deter retail shoppers.

More bad news may be on the way in the housing sector. The Washington Post reported Friday that 5 million to 7 million properties could be approaching foreclosure, though they have not yet been repossessed and offered for sale.

Unemployment remains high, and automobile sales dropped in February. "We remain concerned that consumers will remain on the sidelines during this economic recovery," said a Capital Economics research note, quoted by the Times.

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