United States: Retail sales increase slightly in February
March 15, 2017
Retail sales decelerated markedly in February, the latest sign the U.S. economy is losing momentum in the first quarter of the year. Retail sales almost stagnated in February, growing a feeble 0.1% from the previous month. February’s reading was partially explained by delays in tax refunds, which were postponed as a result of the Internal Revenue Service combatting fraud. February’s print was markedly below the revised 0.6% increase in January (previously reported: +0.4% month-on-month) and matched the increase markets had expected.
The report from the Department of Commerce showed that February’s result confirmed weaknesses in the motor vehicle component, which makes up for about a fifth of total retail spending. Declines in sales in electronics stores (-2.6% mom) and lower gasoline prices—sales in gasoline stations dropped 0.6% month-on-month—further weighed on the headline reading. A better performance was observed among building material dealers (+1.8% mom) and health and personal care stores (+0.7% mom), while sales growth in food and beverage stores stagnated. Meanwhile, core retail sales—excluding automobiles, gasoline, building materials and food services—increased 0.2% in February after a 1.1% jump in January.
On a year-on-year basis, growth in retail sales edged down from January’s 6.0% to 5.7% in February. Compared to the same month last year, sales at department stores continued to decline in February (-5.6%), while sales at non-store retailers—a proxy for e-commerce sales—showed another month of double-digit growth (+13.0%). This suggests that American consumers are increasingly opting to make purchases online.
Author: David Ampudia, Economist