Retail sales rose a modest 0.3 percent in February after consumers paused to catch their breath in January, the government said Thursday.
Strong sales in building supply and hardware stores, supermarkets and gasoline stations pushed overall sales up to a seasonally adjusted $167.8 billion last month, the Commerce Department said.
In advance, economists were looking for February sales to hold steady or dip slightly. Yet the department revised away a previously reported January increase and now shows sales for that month unchanged from December. Economists were not unduly concerned. They said a slacker pace was almost inevitable after strong gains in the fall and during the holiday shopping season. Sales rose 1.1 percent in December.
Economists watch retail spending because it represents a third of the economy. They say a number of conflicting factors will influence consumers in the next few months. One drag on spending will be disappointing tax refunds. On the plus side, low interest rates are spurring spending. Another wave of mortgage refinancing is lowering some homeowners' monthly payments, giving them more cash to spend.