United States: Retail sales fall for third straight month in February
March 12, 2015
In February, growth in retail sales decreased 0.6% over the previous month, in nominal terms. The print followed the 0.8% decrease recorded in January and contrasted market expectations of a 0.3% increase. Retail sales had not registered three consecutive monthly contractions for more than five years. Analysts point to the cold winter weather as the main factor behind the falling consumer activity and suggest that first quarter GDP could suffer as a result. Retail sales are a good indicator for the evolution of consumer spending, a key part of economic growth in the United States, as it accounts for over two thirds of overall GDP.
February’s result was driven by a drop in sales at motor vehicle and parts dealers as well as building material and garden supply stores. Sales were also down at department stores and electronics and appliance retailers. Consumers are not spending more despite having additional discretionary income derived from low gasoline prices.
Retail sales excluding cars and gas—a closely watched subcategory of the retail trade index—decreased 0.2% in February over the previous month. The result followed the 0.1% decrease recorded in January and contrasted the 0.5% increase expected by the market.
Retail sales rose 1.7% in annual terms in February, which came in well below the 3.6% tallied in January. However, the annual trend was steady, with annual average growth in retail sales holding at January’s 4.1%.
Author: Carl Kelly, Economist