Tax cuts moved people to shop in February
WASHINGTON – Americans are using the extra money in their paychecks from tax cuts to buy new cars, clothing, sporting goods and electronics. The reduction in Social Security taxes helped lift retail sales for the eighth straight month in February and by the largest amount since the fall.
Retail sales rose 1 percent last month, the Commerce Department said Friday. Shoppers returned to department stores after snowstorms kept many away in January. And they flooded car lots to take advantage of deals.
Still, higher oil prices threaten to chip away at consumers’ disposable income over the next few months. Turmoil in the Middle East has sent oil prices surging this winter. Pump prices jumped 9 percent in February to an average price of $3.38 a gallon, according to AAA’s Daily Fuel Gauge Report. They have gone up even further this month. On Friday, the average price was $3.54 a gallon.
Tax cuts have helped to ease the shock of higher prices. The reduction in payroll taxes is giving most Americans an extra $1,000 to $2,000 this year.
Report shows plunge in government jobs
WASHINGTON – Governments advertised far fewer jobs in January, offering the latest sign that cuts at the state and local level could slow hiring this year.
There were 2.76 million job openings at the end of January, the Labor Department said Friday. That’s down by 161,000, or 5.5 percent, from December’s revised total.
Half of the decline was the result of fewer state and local government positions. Those job openings dropped by 80,000, to 239,000 – the lowest level of state and local openings since last September. Openings at the federal, state and local levels fell by 115,000, a 27 percent decline for that sector.
The monthly Job Openings and Labor Turnover survey also showed that available jobs in the private sector declined 1.8 percent, to 2.45 million. Professional and business services, which include accountants, lawyers and temporary jobs, reported a sharp drop. Openings also dipped in education and health care.
Inventories and sales increased in January
WASHINGTON – Businesses added to their stockpiles in January for a 13th consecutive month and total sales rose by the largest amount in 10 months.
Business inventories rose 0.9 percent in January, the Commerce Department said Friday. Sales for all businesses at the manufacturing, wholesale and retail levels increased 2 percent, the seventh consecutive gain and the largest since March. Healthy gains in sales and inventory restocking should translate into strong orders for U.S. factories.
The string of increases in inventories pushed stockpiles to $1.45 trillion in January. That’s a level that economists consider to be healthy for this stage of the recovery. It’s 10.1 percent higher than the recent low of $1.32 trillion reached in September 2009.