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By Bob Willis
March 13 (Bloomberg) -- Retail sales in the U.S. cooled in February as Americans faced rising fuel bills and a slump in hiring, economists said before a report today.
Purchases increased 0.2 percent last month, partly reflecting gains at service stations as gasoline prices rose, according to the median estimate in a Bloomberg News survey. Other reports today may show the cost of imported goods continued to climb and unemployment claims rose.
The biggest job losses in five years and record fuel costs are eroding consumer confidence and spending, which accounts for more than two-thirds of the economy. Lehman Brothers Holdings Inc. and JPMorgan Chase & Co. last week joined a growing list of banks predicting a recession is at hand as Americans cut back.
``Spending has been, and likely will continue to be, constrained,'' said Drew Matus, senior economist at Lehman Brothers. ``Consumers are decidedly negative.''
The Commerce Department in Washington is due to issue the report at 8:30 a.m. Sales were up 0.3 percent in January and the 79 forecasts for last month ranged from a decline of 0.5 percent to a gain of 0.5 percent.
Excluding auto dealers, sales were also forecast to rise 0.2 percent, with estimates ranging from a decline of 0.4 percent to a 0.5 percent increase.
Prices for goods imported into the U.S. rose 0.8 percent in February following a 1.7 percent increase the prior month as petroleum surged, economists project an 8:30 a.m. report from the Labor Department may show.
Rising Claims
A separate report from Labor, due at the same time, is forecast to show the number of Americans filing first-time claims for jobless benefits rose to 357,000 last week from 351,000.
Americans are buying fewer big-ticket items as the job market deteriorates. Automakers sold 15.3 million vehicles at an annual pace in February, little changed from a three-year low of 15.2 million reached a month earlier, according to industry figures.
Purchases of less-expensive items are also suffering. Sales at chain stores may be up 1 percent in March from the same time last year, half the pace previously projected, the International Council of Shopping Centers and UBS Securities LLC forecast this week.
Wealthy consumers have become ``more cautious,'' Burt Tansky, chief executive at Dallas-based retailer Neiman Marcus Group Inc., said on a conference call last week. Less-affluent shoppers have ``pulled back somewhat in response to concerns about the U.S. economy and stock and housing markets.''
Spending Forecast
Consumer spending may grow at a 0.5 percent pace in the first quarter, the slowest pace since the 1991 recession, according to the median estimate of economists surveyed this month by Bloomberg News.
The slowdown caused the economy to almost stall, the survey also showed. Forecasters said the odds the economy would slide into a recession this year were even, the same as projected last month.
The economy lost 63,000 jobs in February, the most since 2003, the government said last week. The report also showed the unemployment rate unexpectedly fell as some people gave up looking for work and left the labor force.
Record fuel costs and fewer jobs couldn't come at a worse time for Americans, who are also facing declining property and stock prices. The losses leave Americans feeling less wealthy and even less likely to spend.
`Recession'
``Households are reacting to the loss in wealth by cutting back on spending, and lenders are reacting to the loss in their investments by cutting back on credit,'' said Kevin Logan, a senior market economist at Dresdner Kleinwort in New York. ``Falling home prices are taking the economy into a recession.''
The Federal Reserve this week announced a new plan to try to loosen the credit grip. The central bank will lend Treasuries in exchange for debt, including securities backed by mortgages.
Investors also project the Fed will keep lowering the benchmark interest rate to revive the economy. The central bank is likely to cut the rate by three-quarters of a point, to 2.25 percent, on or before its March 18 meeting, according to trading in the futures market.
Bloomberg Survey
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Import Retail Retail Initial
Prices Sales ex-autos Claims
MOM% MOM% MOM% ,000's
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Date of Release 03/13 03/13 03/13 03/13
Observation Period Feb. Feb. Feb. 9-Mar
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Median 0.8% 0.2% 0.2% 357
Average 0.7% 0.1% 0.2% 357
High Forecast 2.0% 0.5% 0.5% 370
Low Forecast -0.7% -0.5% -0.4% 345
Number of Participants 51 79 74 40
Previous 1.7% 0.3% 0.3% 351
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4CAST Ltd. 0.4% 0.1% 0.2% 350
Action Economics 0.9% 0.2% 0.2% 355
AIG Investments 1.3% 0.3% 0.4% ---
Aletti Gestielle SGR --- -0.1% -0.2% 360
Allianz Dresdner Economic --- 0.0% --- ---
Argus Research Corp. 0.5% 0.4% 0.4% ---
Banc of America Securitie --- 0.1% 0.2% ---
Banesto 0.6% 0.3% --- 360
Bank of Tokyo- Mitsubishi 1.4% 0.5% 0.5% 355
Bantleon Bank AG 0.6% 0.2% 0.1% ---
Barclays Capital 0.8% 0.1% 0.1% 360
BBVA 0.9% 0.3% --- ---
Bear, Stearns & Co. 0.9% 0.2% 0.2% 360
BMO Capital Markets 0.7% 0.2% 0.2% 355
BNP Paribas 1.2% 0.1% 0.0% 364
Briefing.com --- -0.1% 0.0% 360
Calyon --- 0.2% 0.2% ---
CEMEX --- 0.4% 0.1% ---
CFC Group 1.0% 0.2% 0.2% 355
CIBC World Markets --- 0.0% -0.1% ---
Citi 1.0% 0.0% 0.4% 350
ClearView Economics --- 0.0% 0.2% ---
Commerzbank AG --- 0.3% 0.2% 355
Credit Suisse 0.5% 0.2% 0.2% 350
Daiwa Securities America --- 0.1% 0.1% ---
DekaBank 0.0% 0.2% 0.3% ---
Desjardins Group 0.5% 0.0% -0.2% 349
Deutsche Bank Securities 1.0% -0.1% 0.2% 370
Deutsche Postbank AG 0.6% 0.2% 0.1% ---
Dresdner Kleinwort 0.2% 0.1% 0.2% ---
DZ Bank 0.8% 0.2% 0.1% 355
First Trust Advisors 0.6% 0.2% 0.2% 352
Fortis --- 0.3% 0.3% ---
FTN Financial --- 0.0% 0.1% ---
Global Insight Inc. --- 0.1% 0.1% ---
Goldman, Sachs & Co. --- 0.0% 0.2% ---
H&R Block Financial Advis 0.2% 0.2% 0.2% 365
Helaba 1.0% 0.2% 0.2% ---
High Frequency Economics 0.8% 0.2% 0.3% 360
Horizon Investments 0.9% 0.1% 0.1% ---
HSBC Markets 0.6% 0.0% 0.0% 355
IDEAglobal 1.0% 0.2% 0.2% 359
Informa Global Markets 0.5% 0.0% 0.4% 350
ING Financial Markets --- 0.0% 0.0% ---
Insight Economics -0.5% 0.2% 0.2% 360
Intesa-SanPaulo 0.5% 0.3% 0.2% ---
J.P. Morgan Chase 0.8% -0.1% -0.4% 360
Janney Montgomery Scott L 0.9% 0.4% 0.5% ---
JPMorgan Private Client --- -0.1% 0.1% 360
Landesbank Berlin 2.0% -0.2% -0.3% ---
Landesbank BW 1.0% 0.0% --- ---
Lehman Brothers 0.9% 0.0% 0.2% 355
Lloyds TSB 0.8% 0.3% 0.2% 350
Maria Fiorini Ramirez Inc --- 0.2% 0.2% 350
Merrill Lynch 0.7% -0.5% -0.3% 365
Mizuho Securities 1.0% 0.3% 0.3% ---
Moody's Economy.com 0.6% 0.2% 0.2% 355
Morgan Keegan & Co. --- 0.4% 0.4% ---
Morgan Stanley & Co. --- -0.1% 0.2% ---
National Bank Financial --- 0.4% 0.4% ---
National City Bank 0.9% 0.1% 0.3% ---
Natixis --- -0.2% -0.2% ---
Nomura Securities Intl. --- -0.2% -0.1% ---
Nord/LB 0.7% 0.3% 0.4% 345
PNC Bank --- 0.2% 0.3% ---
Ried, Thunberg & Co. 0.1% -0.1% 0.2% 360
Scotia Capital 1.2% 0.0% 0.2% ---
Societe Generale --- 0.3% 0.4% 360
Stone & McCarthy Research 0.4% 0.0% 0.0% 355
TD Securities --- 0.1% 0.0% ---
Thomson Financial/IFR 0.8% 0.3% 0.3% 360
UBS Securities LLC -0.7% -0.1% 0.0% 360
Unicredit MIB 0.8% 0.3% --- 360
University of Maryland 1.4% 0.3% 0.3% ---
Wachovia Corp. --- 0.3% 0.3% ---
Wells Fargo & Co. --- 0.2% 0.2% ---
WestLB AG 1.5% 0.3% 0.2% ---
Westpac Banking Co. --- 0.3% 0.2% 355
Wrightson Associates 0.5% 0.4% 0.4% 360
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To contact the reporter on this story: Bob Willis in Washington at bwillis@bloomberg.net
Last Updated: March 13, 2008 00:01 EDT
