U.S. retail sales rise despite winter blues

Economists, however, warned against placing too much weight on the dip in sentiment, saying it was not a good predictor of future sales. Consumer spending has continued to surprise on the upside even with confidence trending lower.

“What is more important is what happens in the job market and that market is improving. February was distorted by storms, but the underlying trend is up and March will be strong,” said Bill Cheney, chief economist at John Hancock Financial Services in Boston.

Sluggish consumer spending had fed worries the economy's recovery from the worst downturn in seven decades could falter when support from government stimulus and the swing in the inventory cycle disappears.

Motor vehicle and parts purchases extended their decline last month, falling 2 percent, likely reflecting a drop in demand by consumers nervous about vehicle recalls by Toyota Motor Corp. Excluding motor vehicles, retail sales rose 0.8 percent, building on a 0.5 percent rise the prior month.

Even more encouraging, core retail sales — which correspond most closely with the consumer spending component of the government's gross domestic product report — increased 0.9 percent after rising 0.6 percent in January.

“This implies that personal consumption is on track to exceed 2.0 percent for the first quarter of the year and bodes well for a greater than 3.0 percent print on gross domestic product,” said Joseph Brusuelas, chief economist at Brusuelas Analytics in Stamford, Connecticut.

A second report from the Commerce Department showed business inventories were unchanged in January after falling by 0.3 percent in December.

Inventories are a key component of gross domestic product changes over the business cycle and a sharp slowdown in the pace of inventory liquidation handed the economy its fastest growth rate in six years in the fourth quarter.

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