American shoppers snapped up new cars, clothing and electronics in February, pushing retail sales up for the eighth straight month.

Retail sales rose one per cent last month, the Commerce Department has reported. Part of the gain reflected higher prices for petrol. Still, excluding sales at petrol stations, retail sales rose a solid 0.9 per cent, said a report in our sister publication, the Gulf Daily News.

February's jump in sales followed a strong upward revision that showed a 0.7 per cent increase in January. That was more than double the original estimate.

Sales totalled $387.1 billion, up 15.3 per cent from the recession low reached in December 2008.

A Social Security tax cut and rising employment will likely encourage consumers to spend more this year, although higher gas prices will cut into their disposable income.

"This is a very encouraging report," said Paul Ashworth, chief US economist at Capital Economics. He said spending should be a strong 3 per cent or more in the first three months of this year. This category is closely watched because it accounts for 70 per cent of total economic activity.

The tax cut is "undoubtedly still providing a temporary boost," Ashworth said. But he cautioned that higher energy prices would start affecting household budgets in the next month or two.

Separately, the Labour Department said job openings fell by 161,000 in January, or a 5.5 per cent decline. Half of the drop was the result of fewer jobs advertised by state and local governments, many of which are grappling with budget crises.

Sales by retailers, wholesalers and manufacturers rose 2 per cent in January, the Commerce Department said in a second report. That was the seventh consecutive gain and the strongest since last March.

Higher sales encouraged companies to boost inventories 0.9 per cent, the 13th consecutive gain. The rise in sales and inventories should translate into increased production by manufacturers.

Car sales led the February increase in retail sales, rising 2.3 per cent. Dealers have been enjoying stronger demand in recent months as the economy improves and more people find jobs.

The major carmakers offered discounts last month and that gave added momentum to sales. All the major car companies reported double-digit gains.

Higher oil prices also pushed sales up. Petrol station sales climbed 1.4 per cent, the biggest jump since December. Better weather brought people back to department stores.

Sales rose 1 per cent, a rebound from a 0.4 per cent drop in January when winter storms kept people from shopping.

Online shopping, which had benefited from the bad weather in January, showed a 0.3 per cent dip in February.

Sales at electronics and appliance stores rose 0.9 per cent in February after falling 0.2 per cent in January.Sales at specialty clothing stores rose 0.8 per cent. Sales at hardware stores bounced back in February, rising 0.6 per cent after having fallen 1.3 per cent in January, a reflection of the severe weather. – TradeArabia News Service