WASHINGTON, April 1 (Reuters) - U.S. retail sales
increased solidly in February as motor vehicle purchases
rebounded and temperatures warmed up, but surging gasoline
prices because of war in the Middle East could crimp spending in
the months ahead.
Retail sales rose 0.6% after a revised 0.1% dip in January, the
Commerce Department's Census Bureau said on Wednesday.
Economists polled by Reuters had forecast retail sales, which
are mostly goods and are not adjusted for inflation, rising 0.5%
after a previously reported 0.2% drop in January. The Census
Bureau is still catching up on data releases following delays
caused by last year's government shutdown.
The U.S.-Israeli war with Iran has sent global oil prices
surging more than 50%, and the national average retail gasoline
price topped $4 a gallon for the first time in more than three
years. There are concerns that if gasoline prices continue to
rise, they could offset some of the anticipated boost to
consumer spending and the overall economy from tax cuts.
The month-long conflict has also reduced household net
worth, with the S&P 500 index and Dow Jones Industrial Average
in March posting their biggest monthly decline in a long time.
Higher-income households have led consumer spending,
underpinned by robust wealth levels.
Retail sales excluding automobiles, gasoline, building
materials and food services increased 0.5% in February after
rising 0.2% in January. These so-called core retail sales
correspond most closely with the consumer spending component of
gross domestic product. Consumer spending slowed in the fourth
quarter, helping to hold back GDP growth to a 0.7% annualized
rate. The economy grew at a 4.4% pace in the third quarter.