Sales at U.S. retailers excluding auto dealers may have risen in February for a 10th month as consumers began to receive tax refunds, a survey showed in advance of today's statistics. The Commerce Department is likely to report that purchases at non-auto retailers rose 0.5 percent last month after gaining 0.9 percent in January, according to the median of 67 forecasts. Sales including automobiles probably rose 0.6 percent in February after a decline of 0.3 percent. The report is set for 8:30 a.m. in Washington.
Tax cuts signed into law by President George W. Bush last July and made retroactive to January 2003 have boosted the average refund by 4.4 percent this year. The extra money in consumers' wallets may underpin an expansion that is threatened by lackluster hiring, economists said. ``Chain stores and department stores are reporting decent sales for the month, gasoline prices are a little higher, and people were getting tax refunds, so even though employment growth is slow, there are tax cuts that bring growth in disposable income,'' Kevin Logan, senior economist at Dresdner, Kleinwort, Wasserstein in New York, said. ``Once all of this is behind us, which will be in a few months, then I would expect growth in consumer spending to slow.'' A report from the Labor Department at 8:30 a.m. may show that the number of Americans filing initial claims for unemployment insurance declined last week to 343,000, near the lowest in three years, a sign that companies are becoming comfortable with their staff levels.
Sluggish Hiring
Companies still have given little indication of a stepped-up pace of hiring. U.S. employers added 21,000 workers in February, down from 97,000 in January. The economy has created an average 42,000 jobs a month since December, compared with 2.3 million jobs lost since President Bush took office more than three years ago. Another Labor Department report may show import prices increased 0.5 percent in February, the fifth consecutive gain, after rising 1.3 percent in January, according to the median forecast. The weaker dollar has made foreign goods more expensive to U.S. consumers. The report is also scheduled for 8:30 a.m. in Washington. The Treasury Department may report that the government posted its largest February budget deficit on record as spending exceeded revenue by $97.9 billion, according to the median of forecasts. A year earlier, the government reported a budget shortfall of $96.7 billion. The Treasury's monthly budget statement will be released at 2 p.m. in Washington.
Consumer Spending
Consumer spending, which accounts for more than two-thirds of the economy, may rise at a 3.9 percent annual rate next quarter, from 3.6 percent this period, according to a survey of economists by Bloomberg News from Feb. 27 to March 8. The economy will probably expand at a 4.5 percent rate in the first half of the year, compared with 4.1 percent in the final three months of 2003. Sales at retail stores open at least a year rose 6.7 percent in February from a year earlier, according to the International Council of Shopping Centers. Wal-Mart Stores Inc., the world's largest retailer, said its February sales rose 6.2 percent, more than forecast, helped by warm weather and tax refunds. Federated Department Stores Inc., the owner of Macy's, Bloomingdale's, Rich's and Goldsmith's, said last week that sales rose 9 percent for the month, led by women's clothing, cosmetics and handbags. A rise in retail gasoline prices last month also may have helped boost sales. The average price of all grades of gasoline at the pump rose to $1.69 a gallon last month, from $1.61 in January, according to figures from the Energy Department ///www.bloomberg.com