An uptick in the job market, new spring merchandise and warmer weather combined to create the perfect storm for February — boosting major retail sales 4.7 percent and beating out predictions of a 3.4 percent increase, according to a recent article in the Chicago Tribune.
The February increase is just another sign that people are feeling more confident. When they feel better about their jobs and the economy in general, they’re more likely to go and spend money, instead of saving most of it.
You’re seeing this confidence in the increase of luxury and non-essential goods. People will buy items that they want, instead of just focusing on what they need.
This retail spending also benefits the economy because as sales improve, more retailers will increase hiring and those people will spend money at stores, restaurants and that snowballs throughout the economy.
But as higher gas prices loom, analysts worry that any increase at the pump can negatively impact the retail market, keeping shoppers at home and budgets depleted, with less disposable income to spend. However, there is a bright spot on the horizon: If the job market continues to improve and gas prices hold steady, retailers may see strong months to follow.
Source: Chicago Tribune, March 2012