Sales at U.S. retailers increased broadly in February as rising energy prices boosted receipts at gasoline stations, but consumers also spent on a range of products in a sign of resilience in the face of rising gasoline prices.

KEY POINTS: * Total retail sales rose 1.0 percent, the Commerce Department said on Friday, the largest gain since October and the eighth straight monthly advance. * January sales were revised up to a 0.7 percent rise from a previously reported 0.3 percent gain. * Economists polled by Reuters had expected retail sales to increase 1.0 percent last month. Compared to February last, sales were up 8.9 percent. * Excluding autos, sales rose 0.7 percent last month after gaining 0.6 percent in January. That was also in line with economists' expectations.

COMMENTS:

PAUL ASHWORTH, CHIEF U.S. ECONOMIST, CAPITAL ECONOMICS,

TORONTO:

The composition of (February retail sales) growth and the sizable upward revisions to the gains in the two months before make this a very encouraging report. Sales are now estimated to have risen by 0.7 percent m/m in January, more than double the original 0.3 percent estimate. February's gain had less to do with higher energy prices than we had expected. Gasoline station sales increased by only 1.4 percent. Instead, it was driven by a stronger 0.6 percent increase in non-gas non-autos sales, the biggest monthly increase in that underlying category since last October.

Higher food prices probably drove some of the dollar value gain as well. Nevertheless, it now looks like real consumption growth will be above 3 percent annualized in the first quarter. Whether this pace of sales growth can be sustained, however, is uncertain. The payroll tax cut enacted at the start of the year is undoubtedly still providing a temporary boost, while the latest surge in crude energy prices will hit households' real incomes over the next month or two.

MICHAEL FARR, PRESIDENT OF FARR, MILLER & WASHINGTON IN

WASHINGTON, D.C.:

Retail sales were all in line with expectations, so no great surprise. Still, this is evidence that the consumer is spending, though not at a voracious clip.

Japan, once the emergency situation clears, will be a short-term stimulative as they rebuild. That will lift demand. We have to see how extensive the damage is, thank God there wasn't extensive loss of life.

In the longer-term this will add to the country's already enormous debt, which will continue to impede recovery and growth.

Futures seem to be rallying as it looks like the scope of this disaster isn't entirely devastating. But we've been overdue for a pullback for quite a while. The headlines I expected this morning were about Saudi Arabia, and I think it is a good thing that that isn't dominating. It seems the flight to safety trade we saw yesterday is coming off a bit. The dollar seems to hold its strength and commodity prices are falling.

DAVID SLOAN, ECONOMIST WITH IFR ECONOMICS, A UNIT OF THOMSON

REUTERS:

February's retail sales outcome was spot on the market consensus both overall at +1.0 percent and ex auto at +0.7 percent, though the net outcome can be seen as above expectations given a significant upward revision to January (overall to +0.7 percent from +0.3 percent and ex autos to +0.6 percent from +0.3 percent)....The consumer recovery clearly maintained a solid pace in February, though gasoline price hikes are a downside risk for March. January's upward revision means that month's data was not restrained by bad weather as much as was previously thought.

JERRY WEBMAN, CHIEF ECONOMIST, OPPENHEIMER AND COMPANY, NEW

YORK:

It's a good number. It was broadly based. It included some upward revisions to last month's sales with or without cars or gas. It's not all gasoline. It's going in the right direction. Sales weren't harmed yet by the higher gas prices we already started to see in February.

Retail spending has mostly been accelerating among people with sufficient income for discretionary spending so they are not as affected by higher gasoline prices as people with more limited incomes.

GARY THAYER, CHIEF MACRO STRATEGIST, WELLS FARGO ADVISORS, ST.

LOUIS, MISSOURI:

Retail sales was a good number. Consumer spending is still expanding at a healthy pace. Some of the strength we saw during the holidays continued into this year. That bodes well for the economy remaining on track for recovery.

Treasuries are lower. There's a lot of uncertainty about the earthquake in Japan. People are wondering whether Japanese investors might be bringing money back to Japan and there could be some concern about demand for U.S. Treasuries if the Japanese are taking money home.

MARKET REACTION: STOCKS: U.S. stock index futures briefly turned positive. BONDS: U.S. bond prices held onto their earlier losses. FOREX: The dollar maintained its losses versus the yen but held onto gains versus the euro.

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