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Economy

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CEOs optimistic about economy, wary of hiring
Chief executives at the largest U.S. companies are much more optimistic about their sales prospects than they were three months ago, though many remain cautious about hiring.
The Business Roundtable said Wednesday that 72 percent of its members expect sales will increase in the next six months. That’s up from 58 percent at the end of last year. And 38 percent plan to invest more in plant and equipment, up from 30 percent in October-December quarter, when the Roundtable released its last report.
Still, the better outlook hasn’t made the group more optimistic about hiring. Twenty-nine percent of CEOs plan to increase hiring over the next six months, the same percentage as the last two surveys.
The Business Roundtable represents CEOs of the 200 largest U.S. corporations. The survey results are based on 144 responses received between Feb. 11 and March 1.
Associated Press
A shopper looks at hats at Lodge’s store in Albany, N.Y. Americans spent at the fastest pace in five months in February.

Consumers shop through the pain

– Thanks to solid job creation, Americans spent more at retailers in February despite smaller paychecks. The surprisingly strong increase helped allay fears that higher Social Security taxes and gasoline prices might chill spending early this year.

Much of the increase in February retail sales compared with January reflected the higher gas prices. But even excluding the volatile categories of gas, autos and building supply stores, so-called core retail sales rose strongly.

Economists were encouraged by the healthier-than-expected numbers from the Commerce Department on Wednesday. Afterward, some revised their estimates of U.S. economic growth for the January-March quarter.

Americans increased their overall retail spending 1.1 percent last month over January, the department said. It was the sharpest month-to-month increase in five months.

Over the past 12 months, retail sales have risen 4.6 percent – far more than consumer inflation, which has been less than 2 percent over that time.

The retail sales report is the government’s first look each month at consumer spending, which drives about 70 percent of economic activity.

“This all suggests that the hit to spending from the payroll tax cut and higher gasoline prices, which reduce the amount of cash available to spend on other items, hasn’t been too bad,” said Paul Dales, senior U.S. economist at Capital Economics. “The recent pickup in both employment and earnings growth bodes well for consumption growth later in the year, too.”

Barclays raised its estimate of growth in the first quarter by nearly a full percentage point – to an annual rate of 2.5 percent. That would be a leap from the scant 0.1 percent annual growth rate in the October-December quarter.

Auto sales jumped 1.1 percent last month, the sharpest gain since December. Sales at gas stations surged 5 percent, the most since a 6 percent increase in August.

Sales at general merchandise stores, which include major department stores such as Macy’s and big discount stores such as Wal-Mart and Target, rose 0.5 percent in February. But the department store category as a whole fell 1 percent.

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