Retail sales increased 0.2% in February, though spending up less than expected
Consumers spent at a slower than expected pace in February, though underlying readings indicated that sales still grew at a solid pace despite worries over an economic slowdown and rising inflation.
Retail sales increased 0.2% on the month, better than the downwardly revised decline of 1.2% the prior month but below the Dow Jones estimate for a 0.6% increase, according to the advanced reading Monday from the Commerce Department. Excluding autos, the increase was 0.3%, in line with expectations.
The sales number is adjusted for seasonal factors but not for inflation. Prices rose 0.2% on the month, according to a previous Labor Department report, indicating that spending was about on pace with inflation.
The so-called control group, which strips out non-core sectors and feeds directly into gross domestic product calculations, rose a better than expected 1%.
Online spending helped boost the sales number for the month, with nonstore retailers reporting a 2.4% increase. Health and personal care showed a 1.7% gain while food and beverage outlets saw a 0.4% increase.
On the downside, bars and restaurants reported a 1.5% decrease while gas stations were off 1% amid falling prices at the pump.
Sales overall increased 3.1% on a year over year basis, better than the 2.8% inflation rate as measured by the consumer price index.
One downbeat note from the report was a steep revision for January, which originally was reported as a 0.9% decline.
The release comes amid heightened worries over economic growth, particularly as President Donald Trump engages in an aggressive tariff battle with leading U.S. trading partners. Economists worry that the tariffs will drive up inflation and slow the economy.
Some indicators, such as the Atlanta Federal Reserve’s GDPNow tracker of economic data, are showing that growth could be negative in the first quarter, though the solid showing for control retail sales could result in an upward revision later today.
In other economic news Monday, the New York Fed’s measure of factory activity in the region posted an unexpectedly sharp drop for March.
The Empire State Manufacturing Survey posted a reading of -20 for the month, representing the difference between companies seeing expansion against contraction. The number indicated a drop from the 5.7 level in February and was well below the estimate for -1.8.
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