Retail sales improved in February, but not among those hit hardest by 6.2 percent payroll tax

The stock market is soaring. Unemployment is down. More houses are being built.

And today Uncle Sam reported that we're spending more at stores. 

The economy's back, baby!

Not so fast.

Yes, Department of Commerce data show that retail sales in February were stronger than anticipated.

Total sales last month were up 1.1 percent over the January numbers and were 4.6 percent higher than in February 2012. Those numbers were substantially better than projections of a 0.5 percent monthly increase and a 0.2 percent annual improvement.

But there's a definite divide in recent spending patterns.

"The things you'd expect the well-to-do to spend on which is
housing and automobiles have all gone up dramatically," says Dan Alpert, founder and managing partner of Westwood
Capital.

Alpert says that a closer look at the data shows declines in spending on things that might be affected by the return of the 6.2 percent rate of payroll tax withholding.

Food services and bars dropped 0.7 percent compared to January. Home
furnishing dropped 1.6 percent and electronics and appliances were off 0.2 percent.

True, these aren't dramatic spending drops. But they are in product areas that might cause second thoughts about buying among folks who must watch their income and spending closely.

By losing some of their discretionary income in January when the 2 percentage point payroll tax holiday expired, these folks — which are most of us — appear, based on the February numbers, to be pulling back on expenditures.

Now that we're two and a half months into the regular 6.2 percent payroll tax collection, has it changed how you manage your money?

You also might find these items of interest:

• 6.2% payroll tax: Bad for businesses, too?
• Has the return of the full payroll tax cut your spending?
• What's your 2013 income tax rate?