U.S. retail sales slowed sharply in February after big gains the previous two months as delays in tax refunds apparently offset the mild weather.
The Commerce Department said retail sales increased 0.1%, matching economists’ estimates, while a measure of core sales — which excludes the volatile sectors of autos, gasoline, food services and building materials — also rose 0.1%, below economists’ 0.2% forecast.
But the retail sales gain for January was revised up to a robust 0.6% from 0.4% and, as USA Today reports, “Consumers are still poised to drive economic growth again this year because they continue to benefit from healthy job and income growth, and record home and stock prices.”
“Even after the setback in February, retailers have gotten off to a good start this year, helped by a steadily growing U.S. economy and the most confidence among consumers in more than decade,” MarketWatch said, noting that retail sales were 3.7% higher in the first two months of 2017 than the same period last year.
While delayed tax refunds early in 2017 could have curtailed spending last month, Barclays economist Rob Martin said that could shift some purchases into the second quarter, boosting spending in that period.
February sales also reflected a 2% drop in sales at auto dealers and a 6% decline in gasoline sales. Auto purchases account for about 20% of retail spending.
Excluding autos and gas, retail sales rose 0.2% in February, the Commerce Department said.
Stronger sales for furniture stores (up 0.7%), online retailers (up 1.2%) and health and beauty stores (up 0.7%) were offset by declines at department stores (down 1.1%) and outlets that sell electronics and appliances (down 2.8%), clothing (down 0.5%) and sporting goods (down 0.4%.
“The upshot is that these figures should prompt a round of modest upward revisions to first-quarter GDP growth,” economist Paul Ashworth of Capital Economics wrote in a note to clients.