United States-Decline in retail sales.

UNITED STATES-DROP IN RETAIL MEAT SALES.

U.S. retail sales fell slightly in February but performed much better than expected, with increases in an array of businesses from furniture to clothing and electronics suggesting consumer resilience to a recession throwing droves of people out of work.

Meanwhile, new U.S. claims for state unemployment benefits rebounded last week while total claims hit a record high, a government report showed, suggesting no relief to the severe erosion in labor markets.

Retail sales dipped by 0.1% last month, the Commerce Department said Thursday. Economists expected a bigger drop of 0.4%.

And sales in January were revised up sharply, surging 1.8% instead of rising by 1.0% as originally reported.

Automobile and parts sales plunged 4.3% in February. Excluding autos, all other sales climbed 0.7% -- much better than the 0.1% gain expected by economists. Ex-auto sales in January had gone up an upwardly revised 1.6% -- following five straight, large drops.

Gas station sales gave a lift to the overall retail number. Last month, gasoline station sales climbed 3.4%. Gas sales rose 2.8% in January. Stripping away sales at gas stations, demand at all other retailers decreased 0.4% in February.

The retail sales report details how people spend their money. Consumer spending is a vital part of the economy, making up about 70% of gross domestic product, which is the broad measure of economic activity. Weakness in spending in recent months is both a cause and symptom of the recession. People didn’t open their wallets because the stock market collapsed, home prices crashed, heavy household debt, and fears of layoffs. Data last week showed the savings rate in January reached a nearly 14-year high. The Commerce Department reported personal savings as a percentage of disposable personal income was 5.0%, the highest since 5.5% in March 1995 and up from 3.9% during December 2008. The economy fell 6.2% at the end of 2008, the worst showing in almost 27 years. Companies losing revenues to the slump are cutting costs by firing people. The economy in February shed 651,000 jobs, raising total job losses since the recession began in December 2007 to 4.4 million. National Semiconductor Corp., with net income down 71% in the quarter ended March 1, announced Wednesday plans to eliminate 1,725 jobs, or 26% of the Santa Clara, Calif., technology company’s workforce. The rising unemployment rate is pushing up credit card charge-offs; those reached a new high of 7.74% in January. Uncollectible debt could lead banks to reduce credit lines to customers, which would chill spending and hurt the economy further.

Year-over-year, car and parts sales were 23.5% lower from February 2008.

Excluding auto sales and gas station sales, all other retailers saw sales rise 0.5% in February.

Sales last month climbed 2.8% at clothing stores; 1.2% at electronic stores; 1.3% at general merchandise stores; 0.3% at mail order and Internet retailers; 0.6% at health and personal care stores; 0.7% at furniture retailers; and 0.2% at sporting goods, hobby, book and music stores.

Sales fell 0.2% at eating and drinking places; 0.7% at food and beverage stores; and 0.2% at building material and garden supplies dealers.

Jobless Claims Climb

Initial claims for jobless benefits rose 9,000 to 654,000 after seasonal adjustments in the week ended March 7, the Labor Department said in a weekly report Thursday, slightly higher than the 6,000 rise that Wall Street economists in a Dow Jones Newswires survey expected. The previous week was revised to show a smaller decline of 25,000.

Jobless claims have nearly doubled in the last year.

The four-week average, which aims to smooth volatility in the data, rose for a seventh-straight week, by 6,750 to 650,000. That’s the highest since October 1982.

The U.S. has lost 4.4 million jobs since the recession started in December 2007, with almost half of those losses coming in the last three months alone including the largest monthly drop in six decades in December, 681,000, and declines in excess of 600,000 in both January and February.

The latest jobless claims figures point to another dramatic payroll decline in March, which should push the unemployment rate -- already a 25-year high of 8.1% -- up even more.

In remarks to the Council on Foreign Relations Tuesday, Federal Reserve Chairman Ben Bernanke called the prospect of double-digit jobless rates "certainly well within the realm of possibility," though not the baseline scenario.

Meanwhile, according to Thursday’s report the tally of continuing claims -- those drawn by workers collecting benefits for more than one week in the week ended Feb. 28 -- jumped 193,000 to 5,317,000, the highest level since the government started keeping track in 1967.

Continuing claims are up more than 2.5 million in the past year alone, a reflection of how hard it is for the unemployed to find new work.

Indeed, according to last week’s employment report 2.9 million people were unemployed for 27 weeks or more in February, up from just 1.3 million at the start of the recession.

The unemployment rate for workers with unemployment insurance increased 0.2 percentage point to 4%, according to Thursday’s report, the highest since June 1983.

Not adjusted to reflect seasonal fluctuations, New York reported the largest increase in new claims during the Feb. 28 week, 16,481, due to layoffs in the service and transportation industries.

Missouri reported the largest decrease, 3,350, due to fewer layoffs in construction and manufacturing.