Retail sales tumble in February

In this file photo shoppers walk at the entrance of the Nordstrom store in Broomfield, Colorado June 7, 2007. U.S. retail sales excluding cars fell in February in a broad pullback by consumers that could tip an already fragile economy into recession, according to a private report released on Wednesday.

NEW YORK (Reuters) - Retail sales fell at the fastest pace in at least five years and could tip an already fragile economy into recession, according to a private report released on Wednesday.

Retail sales tumbled 1.1 percent last month, compared with a 0.2 percent gain in January, said SpendingPulse, the retail data service of MasterCard Advisors, an arm of MasterCard Worldwide (MA.N). The report excludes auto sales.

"It's definitely the biggest drop in our history," said Kamalesh Rao, director of economic research at MasterCard Advisors. SpendingPulse's retail data series started in 2003.

The drop in retail sales may be a signal that consumer spending, which accounts for more than two-thirds of U.S. economic activity, has finally buckled under the weight of a housing bust, a weakening job market and soaring food and energy prices.

"This is reflecting what is happening in the labor market. We have been seeing a souring in spending in the past couple of months," he said.

On Friday, the government reported net job loss for a second straight month in February, which surprised economists and raised worries that the United States may be in a recession.

In February, consumers cut back on nearly all types of items. Even the few bright retail areas which had posted solid gains such as gasoline, groceries and electronics faltered, according to SpendingPulse.

SpendingPulse's "core" retail gauge declined 1.0 percent in February, compared with January, when sales were unchanged.

Core sales exclude autos, gasoline and building materials, which can swing sharply from month to month.

The SpendingPulse data are derived from the aggregate sales in the MasterCard U.S. payment network, coupled with estimates on all other payment methods including cash and check.

The government releases its retail sales report for February on Thursday. Sales excluding autos are expected to rise 0.2 percent, according to a Reuters poll of economists.

(Reporting by Richard Leong; Editing by Tom Hals)