The reason for the rise of the retail sales in the U.S. in February was the strongest demand for automobiles since 2008.
The 1.1% rise in February follows a 0.4% rise in January, meaning that purchases may have climbed 0.7%, excluding autos. A pickup in payrolls accompanied by limited wage gains may not be enough to satisfy Federal Reserve officials, who today will probably reaffirm a commitment to keep interest rates low.
“The labor market is growing and credit is getting better, and these are two big sources for consumer spending,” said Millan Mulraine, a senior U.S. strategist at TD Securities in New York. “I don’t think the Fed will declare victory yet because the economy is still not close to where they want it to be.”
In February cars sold at the fastest pace in the last four years, led by Chrysler Group LLC and General Motors Co, the light-vehicle sales being the strongest since February 2008. According to GM the rise of demand is due to stronger employment and good credit availability, which led to improving consumer sentiment.
The retail sales data also reflect in increased gas prices which in February averaged $3.56 a gallon, or 18 cents more than January. It’s climbed further this month, reaching $3.80 on March 11, the highest since May.