U.S. retail sales unexpectedly fell in February for a third month, adding to signs that consumer spending will cool this quarter from the previous period’s hot pace, according to Commerce Department figures released Wednesday.
Highlights of Retail Sales (February)
The results indicate consumer spending, the biggest part of the economy, is easing after rising at a 3.8 percent annualized pace in the fourth quarter, the fastest in more than a year. Shoppers may be taking a breather following a run-up in borrowing in late 2017, and relatively tepid wage growth is limiting Americans’ purchasing power.
In addition to declines at auto dealers and gas stations, February’s figures reflected lower demand at furniture and home furnishing stores, electronics and appliance vendors, food and beverage sellers and health and personal care stores. General merchandise stores saw a 0.4 percent decline in receipts, the most since May, following a similar advance in January.
On the brighter side, building-material stores reported a 1.9 percent sales gain in February, following a 1.7 percent decline.
Even with the latest sluggish sales figures, job-market strength, rising property values and lower taxes are buoying Americans’ sentiment and should support steady gains in spending. Consumption was probably sufficient to keep Federal Reserve policy makers on track for a widely expected interest- rate increase next week.
“There’s clearly some buyers’ strike going on in the last couple of months, but we know that consumer fundamentals are incredibly sound,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York. “People may be surprised by the weaker numbers here but it’s par for the course after a stronger fourth quarter.”
- Excluding automobiles and gasoline, sales rose 0.3 percent, matching forecasts, after a 0.1 percent decline the previous month
- Receipts at gasoline stations fell 1.2 percent
— With assistance by Chris Middleton