March 13 - Consumers hit the stores last month - pushing retail sales to their largest gain in five months- helping to allay fears that the payroll tax hike would stop them from shopping. Bobbi Rebell reports.
Bucking the trend of higher gas prices and taxes, Americans engaged in a little retail therapy last month- driving sales to their highest growth rate in five months. The reason? They are getting tax refunds and more people are working. Joe Welter follows consumer trends at Deloitte: SOUNDBITE: JOE WELTER, RETAIL LEADER AND PARTNER, DELOITTE (ENGLISH) SAYING: "The retail business itself hired something like 24,000 people this last month. So the job market and the opportunities there and a little bit of optimism about retaining jobs, all of those factors are real positive." Welter adds that higher home prices and a rising stock market- and lower savings are also helping fuel consumer spending. REPORTER BRIDGE: BOBBI REBELL, REUTERS REPORTER (ENGLISH) SAYING: "Key here is that core sales went up. That excludes things like gasoline, car purchases and building materials. Economists watch it closely because it corresponds to the consumer spending component of G.D.P. and it tells us a lot about the broader economic picture." Telsey Advisory Group senior retail analyst Joe Feldman: SOUNDBITE: JOE FELDMAN, SENIOR RETAIL ANALYST, TELSEY ADVISORY GROUP (ENGLISH) SAYING: "We think that the recovery is for real and that we've seen stable growth. We don't expect, you know, an astronomical rise in the growth rate of G.D.P., but still 2, 3 percent. That's steady growth and that is what we think we are going to get. That supports retail sales in that 2, 3 percent area, maybe a touch higher." Especially for retailers whose fortunes are tied to the escalating stock market and improving housing sector. SOUNDBITE: JOE FELDMAN, SENIOR RETAIL ANALYST, TELSEY ADVISORY GROUP (ENGLISH) SAYING: "You've seen improving trends especially as the stock market has done better, you've seen better trends at some of, a Nordstrom or a Saks they tend to go hand in hand with the stock market. At the same time the home guys have done very, very well. Home Depot and Lowe's and all the home furnishing retailers like Pier 1, a small company we cover called Tile Shop, Ethan Allen has done well. So those categories have done well. " But economists warn: tax refund checks may have temporarily put off the pinch from higher payroll taxes, so the spending could sputter a bit later this spring.