Solid retail sales bolster economic outlook WASHINGTON (Reuters) - Retail sales expanded at their fastest clip in five months in February, the latest sign of momentum for an economy facing headwinds from higher taxes and pricier gasoline. The solid sales last month comes on the heels of strong gains in employment and manufacturing. But the improvement in the economic picture is likely insufficient to shift the Federal Reserve from its very accommodative monetary policy stance. The economy in February is looking solid. None of this, however, is likely to cause the Fed to change tack in the near term," said John Ryding, chief economist at RDQ Economics in New York. Retail sales increased 1.1 percent, the largest rise since September, after a revised 0.2 percent gain in January. That was well above economists' forecasts for a 0.5 percent advance. So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, rose 0.4 percent after increasing 0.3 percent in January. The upbeat report helped to lift to the dollar to a seven-month high against a basket of currencies. Prices for U.S. government debt fell and stocks on Wall Street slipped after a recent rally. The healthy gains in retail sales came despite the end of a 2 percent payroll tax cut and an increase in tax rates for wealthy Americans on January 1. Spending is being supported by the stock market rally, rising home prices and sustained job gains which are starting to push wages higher. The gains in core sales in the first two months of the year offered hope that consumer spending, which accounts for about 70 percent of the U.S. economy, would probably not slow much this quarter after growing at a 2.1 percent annual rate in the fourth quarter. A second report from the Commerce Department showed business inventories rose by the most in more than 1-1/2 years in January. Retail inventories, excluding autos - which go into the calculation of gross domestic product - recorded their largest increase since August 1995. That and the rise in core retail sales should help boost economic growth after output barely expanded in the last three months of 2012. Economists raised their first-quarter growth estimates by as much as eight tenths of a percentage point after the reports. Receipts at clothing stores rose 0.2 percent.