Retail Sales: Tomorrow's Headliners

NEW YORK (TheStreet) -- Retail sales from the government will set the table for Friday's trading session, with economists expecting February's data to show a reversal of January's surprising strength.

The Census Bureau is expected to say that retail sales fell 0.2% last month after a 0.5% rise in January. Excluding autos, sales should rise 0.1%, down from January's 0.6% increase. The report is scheduled for release at 8:30 a.m. EDT.

Any weakness in February's figures should not come as a surprise, as the employment picture in the U.S. remains troublesome. Last week, the Labor Department said the economy lost 36,000 jobs last month, while January's payrolls loss was revised higher by 6,000.

On the bright side, same-store sales data from 30 retailers tracked by Thomson Reuters showed a better-than-expected 4%, despite fears that harsh weather conditions would keep shoppers away from stores. Analysts at Thomson Reuters had forecasted a 2.9% for last month.

"Despite the reports that indicate consumer confidence and sentiment remains low, monthly retail sales and same-store sales reports demonstrate that the consumer is not dead and in fact is spending," said Robert Pavlik, chief market strategist with Banyan Partners, in an email. "Another positive relates to the low inventory levels which represent an encouraging sign for future growth. Low inventory levels mean that as demand continues to increase producers will have to boost production in order to satisfy demand."

In addition to the government's retail sales data, investors will be sifting through earnings releases from a handful of retailers. After the close of trading Thursday, Aeropostale (ARO), Pacific Sunwear (PSUN) and Zumiez (ZUMZ) will open their books on the last quarter.

AnnTaylor (ANN) will report quarterly results before the start of trading Friday. Biopharmaceutical company Novavax (NVAX) will also post earnings early Friday.

Elsewhere on the economic front, at 9:55 a.m. EDT the University of Michigan will release the March reading on its consumer sentiment index, which should increase slightly to 74 from 73.6 in February. Shortly after, the January read on business inventories should show a 0.1% increase in January after a 0.2% decline in December.

-- Written by Robert Holmes in Boston.

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