Many retailers reported strong sales gains for February in the latest sign that Americans are feeling more confident in the economy.
As merchants reported their monthly sales figures Thursday, retailers including Target, Macy'sand Limited reported sales gains that exceeded Wall Street estimates.
The figures are based on revenue at stores opened at least a year and are considered an indicator of a retailer's health. Only a small group of retailers report monthly sales figures, but industry watchers say there's reason to be optimistic by looking at the numbers of those that do because they offer a snapshot of consumer spending, which accounts for more than 70 percent of all economic activity.
"No one is declaring victory yet. But there's general optimism in the air," said Arnold Aronson, managing director of retail strategies at consulting firm Kurt Salmon.
An unusually mild winter helped get people into stores to shop for close and shoes in February. But what had a bigger impact is the improving economy, which boosted shoppers' moods during the month to the highest level it's been at in a year, according to a widely-watched barometer of consumer confidence released yesterday by private research group the Conference Board.
The government reported that the unemployment rate fell to 8.3 percent, the lowest in three years and the first time since 1994 that the unemployment has fallen five months in a row. Meanwhile, the four-week average of people seeking unemployment aid fell to the lowest point in four years. Economists expect employers to add another 210,000 jobs when job figures for February are out next Friday.
Meanwhile, Wall Street hit two milestones. The Nasdaq composite index briefly touched 3,000 on Wednesday for the first time since the collapse in dot-com stocks more than a decade ago. Stocks ended lower, but it was still the best February on Wall Street in 14 years. That came a day after the Dow Jones industrial average closed above 13,000 for the first time since May 2008.
But there are reasons for some caution. Rising gas prices could threaten consumer spending particularly among the low-to middle income shopper. The price of gas has jumped 45 cents since Jan. 1 and is the highest on record for this time of year, an average of $3.73 a gallon.
That didn't seem to hurt retailers' February results. Target's sales rebounded after a muted holiday shopping season.
Its key sales figure rose 7 percent in February as more people came to stores and spent more on core categories such as food and health care products. Analysts expected a 5.2 percent rise.
Limited , which operates Victoria's Secret and Bath and Body Works, had an 8 percent increase in revenue at stores opened at least a year. That's better than the 6.2 percent gain analysts had expected.
Limited has found a niche with its chains, which offer lingerie and beauty and bath products, small luxuries that people will buy for themselves despite the uncertain economy.
And department-store chain Macy's reported a 4.6 percent increase, better than the 3.5 percent gain expected by analysts.
"We saw good consumer response to our early spring deliveries in women's apparel, and continued strong trends in accessories, shoes, cosmetics, men's and home, which bodes well for the months ahead," said Terry J. Lundgren, chairman, president and chief executive officer of Macy's in a statement.
A list of the results so far follows: