Gas prices ate into Americans' budgets last month
High fuel costs caused us to pay more at the pump in February and cut back just about everywhere else.
So how did you spend your February? Probably by spending a whole lot on gas and very little on anything else.
The Census Bureau indicated that retail sales were up in February to their highest in five months, but gave a whole lot of credit to gas prices that AAA says peaked close to $3.80 a gallon nationwide near the end of the month. That fueled a 5% hike in gas station sales from January to February, but didn't give companies that weren't Exxon Mobil (XOM) or ConocoPhillips (COP) much reason for joy.
Fuel prices have dropped since, but they've already taken a hefty toll on businesses in the suburbs. With drivers less likely to waste gas on a jaunt to the local strip mall or to their casual-dining chain of choice, spending at department stores like Macy's (M) and J.C. Penney (JCP) dropped 3.8% from February of last year while sales at restaurants like Darden's (DRI) Olive Garden, Bloomin' Brands' (BLMN) Outback Steakhouse and Brinker International's (EAT) Chili's were off 4%.
February's an ugly catch month between the end of the holiday season and the start of spring. Throw in some harsh late-season winter storms in the Midwest and Northeast, and it becomes even more nightmarish. In fact, one of the few bits of good news keeping the month from being a complete spending disaster was the 4.5% uptick in sales at home and garden stores like Home Depot (HD) and Lowe's (LOW) from February of last year. All those sales of shovels and bags of salt pile up in a hurry.
So is there any reason to hope for a more prosperous spring ahead? Well, there is the auto industry. Aided by Presidents Day deals, automakers sold 8.8% more cars in February than they did last year and continued the resurgent auto sales that helped drive economic recovery in 2012. Combine that with an improved jobs report, strong consumer confidence and record-high stock performance, and consumers should be feeling a lot less dour once they can stop hocking furniture to fill their gas tanks.
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