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Early in the year, the consumer spending growth thesis put forward by many analysts, pundits, and even several retailers themselves postulated that an end to the payroll tax holiday would cause the majority of Americans to tighten their financial belts and cut way back on discretionary spending.
But recent data has not shown that to be the case, at least not yet. Retail sales for the month of February increased more than expected, providing a shard of proof that consumer spending will remain relatively strong this quarter despite the higher taxes.
From the tabulation of receipts from stores that sell merchandise and related services to final consumers, the U.S. Bureau of the Census determined that retail sales rose 1.1 percent. Last month’s figures represented the largest increase since September and showed a marked jump from January’s reading of retail sales growth, which came in at a revised 0.2 percent gain. In fact, retail inventories — a metric used to calculate gross domestic product — recorded their largest increase since August 1995.
After economic output barely expanded in the last three months of 2012, economists polled by Reuters had expected much softer retail sales, and they set their forecast at 0.5 percent…
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