WASHINGTON -- U.S. retail sales rebounded in February and new applications for unemployment benefits hit a fresh three-month low last week, suggesting some strength in the economy after harsh weather abruptly slowed activity in recent months.
The Commerce Department said Thursday retail sales increased 0.3 percent last month as receipts rose in most categories. That followed a revised 0.6 percent drop in January and ended two straight months of declines.
"The consumer appears to be back in the game," said Millan Mulraine, deputy chief economist at TD Securities in New York.
"We see this as further confirmation that the underlying momentum in the economy remains quite favorable, and we look for further upside spending momentum in the coming months."
Economists polled by Reuters had forecast retail sales rising 0.2 percent in February.
U.S. stock index futures extended gains after the data. The dollar trimmed losses against the yen.
An unusually cold and snowy winter disrupted economic activity at the end of 2013 and the beginning of this year. Economists had expected only a marginal increase in retail sales in February after snow and ice blanketed densely populated regions during the first half of the month.
In a separate report, the Labor Department said initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 315,000.
That was the lowest reading since late November. Economists had forecast first-time applications for jobless benefits rising to 330,000 in the week ended March 8.
The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, fell to its lowest level since early December.
"There is certainly no sign of weakening, adding to the evidence that recent slowing in payrolls is weather-related and temporary,"
Harsh weather has hurt job growth, but the labor market is starting to break out of winter's grip. Nonfarm payrolls increased 175,000 in February.
Retail sales are expected to accelerate in the spring as warmer temperatures and improving household finances help to unleash pent-up demand.
Rising homes values and share market prices, as well as some uptick in wages, have left household balance sheets in much better shape since the recovery started nearly five years ago.
So-called core sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product, rose 0.3 percent in February.
That followed a revised 0.6 percent decline in January.
Consumer spending rose at a 2.6 percent annual pace in the fourth-quarter of 2013 and is expected to slow somewhat in the first three months of this year.
Retail sales last month were supported by a 0.3 percent rise in receipts at automobile and parts dealers. That helped to offset a 0.2 percent drop in sales at electronics and appliance stores.
Receipts at building materials and garden equipment stores increased 0.3 percent, likely as consumers bought snow removal equipment. Sales there had risen 1.4 percent in January.
Sales at furniture stores rose as did receipts at clothing stores. There were also gains in receipts at sporting goods shops and restaurants and at nonstore retailers. Sales at food and beverage stores, however, fell.