Retail Sales Post Largest Gain in 5 Months

Retail sales in the United States jumped more than expected in February suggesting consumer spending will hold up despite higher taxes, Reuters reported. Retail sales increased 1.1 percent since September, exceeding all projections, after a revised 0.2 percent gain in January, Commerce Department said on Wednesday. The median forecast was for a 0.5 percent advance. The retail sales data was the latest to suggest momentum in the economy marked by the end of a 2 percent payroll tax cut and an increase in tax rates for wealthy Americans on January 1, according to Reuters. Job gains accelerated in February and manufacturing put in its best performance in 1-1/2 years. “It shows some steady underlying strength,” said Terry Sheehan, an economic analyst at Stone & McCarthy Research in Princeton, New Jersey, the second-best forecaster of retail sales in the last two years, according to data compiled by Bloomberg. “These numbers are cause for cautious optimism.”

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