"It appears that, for now at least, consumers are willing to run down savings or take on additional credit to maintain spending"
- Andrew Grantham of CIBC World Markets
Sales of the U.S. retailers surged in February by most in five months, even despite possible tax increases. The Commerce Department said on Wednesday that retail sales in the world's largest economy jumped 1.1%, posting the largest rise since September, after a revised 0.2% gain in January. Economists, however, expected only a 0.7% gain. The figures are suggesting that consumers' spending, which reflects the overall economic activity in the country, is still holding steady despite a spike in gasoline prices and higher payroll taxes in 2013. In the meantime, an improvement of both labour and property markets has boosted consumer confidence and helped citizens to maintain spending in the face of higher fuel prices.
"It appears that, for now at least, consumers are willing to run down savings or take on additional credit to maintain spending," said Andrew Grantham of CIBC World Markets. "However, with the savings rate already extremely low, it may be a matter of when, rather than if, consumers need to curtail their enthusiasm for shopping."
"It shows some steady underlying strength," said Terry Sheehan, an economic analyst at Stone & McCarthy Research in Princeton. "These numbers are cause for cautious optimism."
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