Retail Sales Inch Lower For Third Month

Lloyd Doyle
March 15, 2018

According to the Commerce Department, overall retail sales dropped 0.1% in February, which was because US consumers spent less at gas stations, auto dealers and department stores.

Furniture and home furnishings stores were up 2.9% year-over-year but down 0.8% from January seasonally adjusted.

Washington, DC, March 14, 2018-Advance estimates of U.S. retail and food services sales for February 2018 were $492.0 billion, a decrease of 0.1% from the previous month, but 4.0% above February 2017, according to the U.S. Census Bureau.

These numbers exclude automobiles, gasoline stations and restaurants. The poor retail sales readings have confounded several reports showing that consumer confidence is soaring and are likely to weigh on first quarter growth.

"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 USA economist at RBC Capital Markets in NY. Sales of newly built homes and existing homes have both increased in the past year, and they need to be outfitted with new furnishing and new appliances. For example, many households experienced delays in receiving tax refunds early this year, giving them less money to spend in January and February relative to prior years. It was the fifth greatest increase by sector, behind non-store retailers, gas stations, miscellaneous store retailers and building materials and garden equipment and supplies stores. Furniture stores suffered a drop in sales for the month of 0.8 percent, and department stores lost 0.9 percent of their sales. Non-store retailers - primarily e-commerce and catalog businesses - posted the greatest gain, up 10.1% from February a year ago.

While spending growth in some of these categories may be simply due to seasonal factors, such as sporting goods and restaurant spending, others signal bigger changes in consumer spending trends.

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