U.S. February Retail Sales Rise 0.1%; Decline Excluding Autos By Shobhana Chandra The consumer got hit with the ugly stick. Consumer spending and borrowing are sucking wind. Get ready to retest and probably break below Feb lows. We're now officially on our way. Gotta love this quote, too: "It appears consumer spending is something short of healthy.'' http://www.bloomberg.com/apps/news?pid=20601087&sid=aljq_KRsyGh0&refer=home March 13 (Bloomberg) -- Retail sales in the U.S. rose less than forecast last month as an increase in gasoline prices limited spending on other goods. The 0.1 percent gain followed no change in the prior month, the Commerce Department said today in Washington. Sales excluding service-station receipts were unchanged as the return of colder weather discouraged shoppers. The figures point to a gradual slowdown in consumer spending that Federal Reserve Chairman Ben S. Bernanke called a ``mainstay'' of the expansion. Fewer purchases, combined with the downturns in housing and manufacturing, make it less likely that growth will accelerate in coming months. ``Once we disentangle the effect of higher gasoline prices on service-station receipts, we see a modest amount of consumer spending,'' Ken Mayland, president of ClearView Economics LLC in Pepper Pike, Ohio, said before the report. ``It appears consumer spending is something short of healthy.'' Sales excluding motor vehicles and gasoline declined 0.3 percent, the most since April 2004, the government said. Economists had forecast retail sales to rise 0.3 percent, according to the median estimate in a Bloomberg News survey. Forecasts ranged from a decline of 0.2 percent to a gain of 0.5 percent. Retail sales account for almost half of all consumer spending, which in turn makes up two-thirds of the economy. Sales excluding automobiles unexpectedly dropped 0.1 percent in February after a revised 0.2 percent gain that was smaller than previously reported. They were projected to rise 0.3 percent in December. An International Council of Shopping Centers report last week showed the smallest same-store sales gain in three months due in part to the colder temperatures. Last month was the coldest February since 1994, according to the National Climatic Data Center in Asheville, North Carolina. `Bad Weather' ``There was downward pressure from bad weather,'' said Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``It drove people toward the cold-weather merchandise on which prices are generally slashed by February.'' Sales at clothing stores dropped 1.8 percent in February, the biggest decrease since September 2005, today's report showed. General merchandise store sales declined 0.6 percent, the most since June 2004. Sales at department stores decreased 1.6 percent. Blizzards in the Midwest and Northeast damped sales of appliances and sporting goods last month at Wal-Mart Stores Inc. The world's biggest retailer last week said February same-store sales rose at the slowest pace since November. Restaurant Receipts Purchases at restaurants and bars dropped 1.2 percent in February, the most since September 2003, today's report showed. Sales at automobile dealerships and parts stores rose 0.9 percent last month after falling 0.9 percent the prior month. Industry figures showed sales of cars and light trucks were little changed in February at an annual pace of 16.6 million units after a 16.7 million rate in January. General Motors Corp., the world's largest automaker, posted gains while Ford Motor Co. and DaimlerChrysler AG had declines. Stores selling building materials and garden supplies showed a 1.4 percent decrease in sales last month, after falling 0.2 percent the prior month. Sales of electronics and appliances declined 0.3 percent. An increase in gasoline prices last month contributed to increased sales at service stations. Filling-station sales rose 1.2 percent in February after a 0.5 percent decrease the prior month. Regular gasoline at the pump rose to $2.51 a gallon the first week of this month, the highest since mid-September, according to the Energy Department. Consumer Spending Consumer spending may grow at an annual rate of 3.2 percent this quarter, after a 4.2 percent pace in the previous three months, according to the median forecast of economists surveyed by Bloomberg from March 1 to March 7. The Fed is likely to hold rates unchanged through most of this year, economists said. Spending growth has averaged a 3.3 percent annual rate since 1990. Excluding autos, gasoline and building materials, the retail group the government uses to calculate gross domestic product figures for consumer spending, sales declined 0.2 percent in February after rising 0.3 percent. The government uses data from other sources to calculate the contribution from the three categories excluded. ``Consumer spending continues to be the mainstay of the current economic expansion,'' Bernanke said in congressional testimony last month. `Moderate' Pace Bernanke said the economy will expand at a ``moderate'' pace, with a ``reasonable possibility'' growth will strengthen during the middle of the year. He also estimates slower growth will help keep inflation contained. Fed policy makers next meet on March 20-21. Labor market figures last week helped explain why consumers will keep shopping, economists said. Employers added 97,000 jobs in February, the unemployment rate unexpectedly fell to 4.5 percent, and hourly wages rose more than forecast, Labor Department showed. Luxury retailers such as Saks Inc. may be one area of industry that benefited more than others from a jump in bonus payments early this year, economists said. The Birmingham, Alabama-based Saks, owner of the Saks Fifth Avenue chain, said February same-store sales surged 25 percent, the best monthly advance in at least six years, as it sold more spring fashions without discounts.