Consumers increased their spending at retail stores by 0.9 percent to $236.5 billion in February after a revised 1 percent gain in January, the Commerce Department said Thursday. It was the seventh straight monthly gain for retail sales.
The bulk of the increase in February came in spending on durable goods, especially autos. Consumers bought $100.7 billion worth of durable goods, up 1.2 percent from January's level. Spending on autos rose 1.8 percent to $59.4 billion, the government said.
Retail sales excluding autos rose 0.6 percent.
The bond market sold off moderately on the news. The yield of the 30-year Treasury rose to 5.56 percent.
Economists surveyed by CBS.MarketWatch.com expected a 0.8 percent rise in retail sales in February, with a 0.6 percent gain excluding autos. They weren't counting on the large revision in January's spending from a 0.2 percent gain to 1 percent, however.
Retail spending amounts to about one-third of economic activity. It's risen 7.3 percent since February 1998 as consumers take advantage of low interest rates, low prices and healthy income gains.
The Federal Reserve is closely watching the economy to see if fast economic growth will ignite inflation. Fed Chairman Alan Greenspan has said the Fed is willing to wait until positive signs of inflation appear. The retail sales report indicates that the economy is gaining strength, but the report contains no information on prices.
Spending on durables has been boosted by low interest rates. Besides autos, consumers are snapping up furniture, appliances, gardening supplies and building materials. Much of the spending is being fueled by the boom in housing.
Sales at building supply stores rose 1.2 percent to $15 billion, and sales at furniture and appliance stores rose 1 percent to $13.9 billion.
Consumers also bought plenty of nondurable goods, particularly clothing, food and gasoline. Sales of nondurable goods increased 0.7 percent to $135.7 billion. Apparel stores increased sales by 1 percent while general merchandise stores increased sales 0.5 percent. Food sales rose 0.9 percent, gas station sales rose 0.8 percent and restaurant sales rose 0.8 percent.
Written By Rex Nutting, Washington bureau chief for CBS MarketWatch