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Retail sales fall, but spending stays strong
Weak auto sales hurt overall results last month but revisions to January show consumers still buying at strong pace.

NEW YORK (CNNMoney.com) - Retail sales took a bigger-than-expected hit in February, according to a government report Tuesday, although revisions to earlier readings suggested that consumers are still spending at a strong pace.

The Census Bureau report showed a 1.3 percent drop in retail sales last month, compared with a 2.9 percent gain in January, which was revised upward from an already strong report.

Economists surveyed by Briefing.com had looked for a 0.9 percent decline in February following the 2.3 percent January gain that was originally reported. With all the revisions, February's retail sales were up 1.6 percent from December, which is the key holiday shopping period.

Excluding volatile auto sales, sales slipped only 0.4 percent in February, less than the 0.5 percent decline that economists had forecast. January sales on that basis were also revised upward to a 2.6 percent gain from the 2.2 percent rise originally reported.

"It's not a bad number," said Gina Martin, an economist with Wachovia, about the latest retail sales reading.

"I think we can't take a lot from the February decline -- it was tiny compared to the massive increase in January. I think in general the consumers are still surprising us with their resiliency and their propensity to keep on spending," Martin added.

Retail sales excluding autos rose 2.1 percent in February from their level in December.

The value of auto sales slipped 0.4 percent from January levels, as General Motors (Research) announced price cuts on many of its models.

The government report follows disappointing February sales numbers from a number of leading retail chains, many of which blamed exceptionally warm January weather, coupled with the snowstorm in the Northeast in February, for cutting into sales last month.

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