March 14, 2003	Friday	Muharram 10, 1424

WASHINGTON, March 13: Iraqi war fears and a icy winter blast sent February retail sales into the steepest plunge since the aftermath of the September 11 attacks, the government said on Thursday.

Retail sales plummeted 1.6 per cent from the previous month, the sharpest plunge since November 2001, after rising 0.3 per cent in January, the Commerce Department figures showed.

“It is really painting a picture of an economy that is dead in the water,” said BMO Financial Group senior economist Sal Guatieri.

“It is much weaker than anticipated.”

In February, consumer confidence had crashed to a 10-year low, US firms axed 308,000 jobs and the diplomatic wrangling persisted ahead of a possible war in Iraq.

“You cannot deny the underlying negatives,” Guatieri said.

The decline in retail sales was about three times the size expected by Wall Street analysts. But when compared with February 2002, retail sales were up 2.6 per cent.

Sales were weak across the board, including items tied to the still-healthy housing market, Guatieri said. Furniture sales, for example, plunged 1.6 per cent.

If automobile sales are excluded, retail sales were still down 1.0 per cent.

So called core retail sales, a figure that strips out volatile sales of automobiles and gasoline, tumbled 1.4 per cent.

A breakdown of the February figures showed sales of autos skidded 3.4 per cent, building materials plunged by a record 7.5 per cent, clothing declined 3.6 per cent, groceries fell 1.0 per cent, sporting goods slid 1.6 per cent and electronics and appliances eased 0.5 per cent.

Sales at restaurants and bars slipped 0.5 per cent.

Among the few areas showing an improvement, sales at general merchandise stores rose 1.2 per cent, department stores sales edged up 0.3 per cent and Internet shopping and catalogue sales climbed 1.3 per cent.

Gasoline sales surged 2.7 per cent, driven up by higher prices at the gasoline pump.—AFP