Retail sales beat expectations

NEW YORK (CNNMoney.com) -- Retail sales rose in February, the government said Friday, surprising economists who expected a decline.

The Commerce Department said total retail sales edged up 0.3% to $355.5 billion last month. Economists surveyed by Briefing.com had anticipated that February sales would drop 0.2%.

February's increase showed that Americans were still making it to the stores despite the snow and cold weather last month and customers were splurging on electronics for the Super Bowl, said Chris Donnelly, a senior executive at consulting firm Accenture.

February retail sales jumped 3.9% compared to the same month in 2009.

"This is consistent with the trend we've been seeing," said Donnelly. "We've seen a gradual thaw in the consumer pocketbook, and there is pent up demand -- we are certainly in a more optimistic place in February 2010 than in February 2009."

Consumer spending accounts for two-thirds of U.S. economic activity, and related reports such as retail sales are used to gauge whether a recovery is underway.

The monthly rise in sales was led by a jump in electronics and appliance store sales, which rose 3.7% last month. Purchases of TVs and other electronics leading up to Super Bowl Sunday, which took place early in the month, was likely a large part of this increase, said Donnelly.

The reading was weighed down by auto sales, which fell 2% after dropping 1.5% in the previous month.

Sales excluding autos and auto parts rose 0.8% last month, also beating expectations. A consensus of economists had projected ex-auto sales to edge up 0.1% in February.

Earlier in the month, many of the nation's retail chains reported much stronger than expected February sales.

Sales tracker Thomson Reuters, which looks at monthly same-store sales for 30 chains including Costco and Target, said February sales rose 4% in February, beating analyst expectations.

Donnelly said retail sales are likely to pick up more in the next few months as the season changes and consumers shop for spring and summer clothing.

"In January, February and March as a three-month stretch, there's not a lot of excitement," he said. "But at the end of March and in April and May, you will see a lot more people spending on apparel as the spring comes out, and a pick up in apparel will be a very encouraging sign."

In a separate report last week, the Labor Department said fewer jobs were lost in February than expected, boosting optimism about a recovering labor market.