United States: Retail sales fall in February but revisions show larger gains in January
Nominal retail sales fell 0.2% on a seasonally-adjusted month-on-month basis in February, markedly contrasting January’s print—which was revised upwards from 0.2% to 0.7%—and missing market expectations of 0.3% growth. Retail sales excluding automobiles, gasoline, building materials and food services—also known as “core” retail sales as they most closely reflect private consumption in GDP—also fell 0.2% in February; however, the January print was markedly revised up 0.6 percentage points to 1.7%.
The February print was mainly weighed by a decline in sales of building materials; food and beverages; electronics and appliances; furniture; and clothing. On the other hand, non-store retail sales, which include e-commerce, grew strongly in the month, and gasoline station sales also registered solid growth due largely to a rebound in oil prices finally transmitting to higher prices at the pump. Auto sales also grew modestly in February according to the reading, which is however usually subject to significant revisions from one month to the next.
In annual terms, growth in retail sales came in at 2.2% in February, down from the revised 2.8% increase recorded in January (previously reported: +2.3% year-on-year). Lastly, annual average retail sales growth fell to 4.6% in February from 4.7% in January.
February’s result coupled with revisions to past month’s figures—largely due to disruptions to data collection during the government shutdown—suggests consumer spending continued to weaken in Q1, but nonetheless paint a more positive picture than previously expected. Furthermore, there is some reason to believe that the February reading was dragged down by temporary factors. Notably, unfavorable weather may have weighed on sales of building materials, while analysts at Goldman Sachs further believe that “the delay in tax refunds [due to the government shutdown] likely contributed to the weak February reading, creating scope for above-trend growth later in the Spring.”