Published: Fri, March 16, 2018
Finance | By Kristine Clayton

United States retail sales unexpectedly fall for third straight month

United States retail sales unexpectedly fall for third straight month

Retail sales, excluding motor vehicle and parts, fell 0.1% in February and rose 4.2% from February past year, according to the U.S. Department of Commerce's monthly report, released Wednesday.

It was the third consecutive month of declining retail sales, the Commerce Department said Wednesday, though they're still 4 percent higher than a year ago. The January data were revised from a fall of 0.3% to a 0.1% contraction.

For the month, some retail categories saw better sales than others.

So-called "core retail sales", which exclude autos, gasoline, building materials and food services, moved up 0.1% in February following no change in January.

Consumer spending, which accounts for more than two-thirds of USA economic activity, appears to have slowed at the start of the year after accelerating at a 3.8% annualised rate in the fourth quarter. The economy created 313,000 jobs in February.

She said this also raises a question for the Federal Reserve: If inflation is not rising, but how the forces of tax cuts, spending increases and now tariffs will lift inflation, how quickly the Fed should raise interest rates in response? The poor retail sales readings have confounded several reports showing that consumer confidence is soaring and are likely to weigh on first quarter growth. Gross domestic product growth estimates for the January-March quarter are around a 2 percent annualized rate. The numbers exclude automobiles, gasoline stations and restaurants.

Clothing and clothing accessory stores were up 5.2 percent year-over-year and up 0.4 percent from January seasonally adjusted.

Consumers also spent more at restaurants and bars and on sporting goods and hobbies. The increase in underlying wholesale prices supports views that consumer inflation will pick up in 2018.

But there were some pockets of strength.

Building materials and garden supply stores were up 5.1 percent year-over-year and up 1.9 percent from January seasonally adjusted.

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

The US central bank's preferred inflation measure, the personal consumption expenditures price index excluding food and energy, has been undershooting its target since May 2012.

Non-store sales, including online pureplays, reached $55.1 billion, which is a 1 percent increase over January and 10.1% gain when compared the prior year period.

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