Americans are using extra money from their tax cuts to buy new cars, clothing, sporting goods and electronics.

The reduction in Social Security taxes helped lift retail sales for the eighth straight month in February and by the largest amount since the fall. Still, higher oil prices threaten to chip away at consumers’ disposable income over the next few months.

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Sales of new homes in the U.S. unexpectedly fell in January to the lowest level on record, a sign that an extension of a government tax credit may not be enough to rekindle demand.

Purchases declined 11 percent to an annual pace of 309,000, below the lowest forecast in a Bloomberg News survey of economists, from a 348,000 pace, figures from the Commerce Department showed today in Washington. The median sales price dropped 2.4 percent from January 2009 and the supply of unsold homes increased.
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