By Kasra Kangarloo
WASHINGTON (MNI) – Retail sales are expected to rise for the eighth
straight month in February, bolstered by consumer optimism in spite of
rising gas prices.
Retail sales are expected to rise 1.0% over the month, according to
a survey of economists by Market New International, while prices
ex-automobiles are expected to rise 0.7%. The report will be released at
8:30 am Friday by the Commerce Department.
“Gas prices will be the primary driver [for the expected
increase],” Russell Price, economist at Ameriprise Financial Inc., said
in a telephone interview. “But consumers are still holding up pretty
well.”
Retail gasoline prices rose to a national average of $3.264 per
gallon in February, compared to the January average of $3.148, according
the Energy Information Administration. This was largely in response to
continued, widespread protests in the greater Middle East and armed
conflict in Libya, the 12th largest exporter of petroleum.
Price did note that recent gains should continue into the coming
months if gas prices remain at their present level, but warned that any
further increases could start to weigh on overall sales.
James O’Sullivan, economist at MF Global Ltd, also noted some
downside risk from the February increase in oil prices, but added that
the expected figure “reflects a pretty strong trend.” O’Sullivan also
mentioned the possibility for bounce-back in sales after volatile
January weather.
According to the Conference Board, consumer confidence rose for the
fifth straight month to a three-year high in February, suggesting a
renewed sense of optimism among consumers.
The two percentage-point reduction in the Social Security payroll
tax, part of the extension of Bush-era tax cuts signed by President
Obama, can also be expected to contribute to sales.
— Kasra Kangarloo is a reporter for Need to Know News
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: MAUDS$,M$U$$$]
