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Retail Sales Get Boost From Mother Nature

Retail sales figures released today suggest stores received a lift in February from a surprising source: warm weather.

Retail sales were up in February across nearly all major categories. They rose 0.7% in the week of March 10, according to International Council of Shopping Centers-Goldman’s weekly measure of major retail chains. Retail sales in the U.S. across a range of major stores like Target and Gap also rose 1.1% on the month in February, the biggest jump in five months, according to the Commerce Department. Excluding gas prices, retail sales were up 0.6% month-on-month. “That’s still a fantastic number,” says Troy Davig, economist with Barclays Capital Research.

Driving the increase, say experts, is the unusually mild temperatures in January and February, which cut heating bills and left consumers with more money to spend. In January, consumer spending on energy and natural gas as a share of total spending fell to its second lowest level in 50 years, according to the U.S. Bureau of Economic Analysis, with natural gas prices about 40% below their level one year ago. This helped offset the punitive 8% rise in gas prices since the beginning of 2012, says Robert Johnson, economic analyst with Morningstar. “Gas prices have not been terribly relevant this time around.”

That said, a prolonged period of higher gas prices may slow economic growth — and hurt sales. Richard Eberling, a professor of economics at Northwood University in Midland, Mich., says it remains unclear whether the better retail figures are supported by a real return to employment growth.

Nevertheless, retailers project better sales for the rest of the year. The National Retail Federation forecasts retail sales up 3.4% this year to $2.53 trillion, citing that the U.S. economy has added 1.2 million jobs over the past six months – the fastest pace since 2006.  Matthew R. Shay, NRF president and CEO, says retailers, however, will keep a tight rein on inventories and prices. “While February sales certainly present continued reason for optimism, retailers are paying close attention to rising gasoline prices,” he says.

For consumers, retail experts say the milder winter has led to more attractive bargains. Less demand for winter apparel in November and December meant more inventory and better selection during February’s and March’s traditional end-of-season clearance sales, says Dan de Grandpre, CEO and editor-in-chief of DealNews.com. In February, he says there were more jackets and long-sleeve shirts at 90% off than in years past. “Opportunistic shoppers are smartly stocking up now on clothes despite having less cash because of high gas prices,” he says.

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    • It would create jobs but the SS is prceitdd to go broke in 18 years. I guess those know it all in Congress cant figure taking the lid off the 90,000 a person pays into and make it unlimited so movie stars and sports figs such as A Rod, Tiger etc would pay more. They arent going to starve.

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