Partly reflecting a steep drop in sales by gas stations, the Commerce Department released a report on Tuesday showing an unexpected decrease in U.S. retail sales in the month of February.
The Commerce Department said retail sales fell by 0.5 percent in February after climbing by an upwardly revised 0.6 percent in January.
The pullback came as a surprise to economists, who had expected retail sales to edge up by 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.
Excluding a 0.9 percent decrease in auto sales, retail sales still slid by 0.4 percent in February after rising by an upwardly revised 0.6 percent in January. Ex-auto sales had been expected to tick up by 0.2 percent.
The unexpected drop in sales came as sales by gas stations plummeted by 2.8 percent in February amid a steep decline in gasoline prices.
Sales by electronics and appliance stores, clothing and accessories stores and building material and supplies dealers also showed significant decreases.
On the other hand, the report showed a 1.4 percent jump in sales by miscellaneous store retailers as well as notable growth in sales by non-store retailers.
Closely watched core retail sales, which exclude autos, gasoline, building materials and food services, were unchanged in February after climbing by an upwardly revised 0.4 percent in January.
Economists had expected core sales to increase by about 0.4 percent compared to the unchanged reading originally reported for the previous month.
Looking ahead, Andrew Hunter, Senior U.S. Economist at Capital Economics, said retail sales are likely to fall sharply in March amid escalating coronavirus fears, stepped up containment measures and consumers avoiding public places like restaurants and cinemas.
“That will drag first-quarter consumption growth lower too, though the hit probably came too late to cause an outright decline in the first quarter,” Hunter said.
He added, “With spending likely to continue falling sharply over the coming weeks, the only question now is how severe the second-quarter decline will be.”
Source: Read Full Article