US Retail Sales Rise

Posted March 13th, 2012 at 9:20 am (UTC-5)
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U.S. retail sales made their biggest gain in five months in February as consumers bought more cars, clothes and appliances.

Economists watch retail sales closely because consumer demand drives about 70 percent of U.S. economic activity.

Tuesday's report from the Commerce Department says overall retail sales rose 1.1 percent last month. Officials also said sales in the previous two months were higher than first estimated.

The increased sales follow several months of gains in the job market that increased consumer confidence.

Retail sales rose even though gasoline prices jumped nearly five cents per liter, which reduced the amount of money consumers had for other purchases.

Improved retail sales are part of the data that top officials of the U.S. central bank are reviewing at their regular gathering in Washington, where they decide where to set the key U.S. interest rate and make other economic policies.

The Fed is not expected to raise interest rates from the ultra-low range where they have been for some time. Low interest rates are intended to bolster the economy by making it easier for businesses to borrow the money they need to buy equipment, build factories, and hire people.

While the world's largest economy is recovering from the worst recession in decades, other data show some weaknesses.

Unemployment, for example, remains at 8.3 percent, which is high by U.S. standards.

Newly-published data on the U.S. trucking and international air cargo industries say these economic areas are still struggling to recover from recession. Economists watch diesel-fuel sales and air freight as a way to judge current and future economic activity.