updated 3/12/2009 1:02:04 PM ET 2009-03-12T17:02:04

Retail sales fell in February for the seventh time in the past eight months. While the decline was less than expected, economists are still looking for continued weakness given the battering households are taking from a prolonged recession.

The Commerce Department reported Thursday that retail sales edged down 0.1 percent last month, less severe than the 0.5 percent drop that economists had expected.

The government also revised January’s performance to show a 1.8 percent rise, the biggest increase in three years and stronger than the 1 percent gain that was originally reported.

Still, analysts are not looking for any sustained rebound in consumer spending for some time given the severity of the current recession, which has caused consumers to sharply retrench in the face of falling home and stock prices and soaring unemployment.

The weakness in February reflected a big 4.3 percent plunge in sales of autos and auto parts, the biggest monthly drop since October.

Excluding the auto sector, retail sales would have risen by 0.7 percent following an even stronger 1.6 percent gain in January, an increase that was originally reported as a 0.9 percent rise.

The strength outside of autos was led by a big 3.4 percent jump in sales at service stations, a gain that primarily reflected a rise in gasoline prices during the month. Excluding gasoline sales, retail sales would have fallen by 0.4 percent in February.

However, there were a number of areas which showed gains ranging from department and other general merchandise stores, up 1.3 percent, to specialty clothing stores, up 2.8 percent, and furniture stores, which saw sales increase by 0.7 percent.

The slide in consumer spending has helped make the current recession deeper and more prolonged. The overall economy as measured by the gross domestic product plunged at an annual rate of 6.2 percent in the final three months of last year, the biggest decline in a quarter-century.

Retail Sales Dip

Much of that weakness stemmed from a 4.3 percent drop in consumer spending, the biggest setback in 28 years. Economists believe consumer spending will fall again in the current quarter, given all the bad news bombarding households.

The nation’s unemployment rate shot up to 8.1 percent in February, the highest level since December 1983, as the economy shed another 651,000 jobs. There have been 4.4 million net job losses since the recession began in December 2007.

The weakness in spending has hammered the retail industry, especially luxury stores such as Neiman Marcus Inc., which said Wednesday it had suffered a rare loss in the quarter that covers the Christmas shopping season, a period when the store normally sees sizable gains.

More on  retail sales   |  the economy

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