Auto slump holds down US retail in February

Auto slump holds down US retail in February
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Washington: Falling auto sales held down the US retail sector in February for the third straight month while a holiday shopping bounce also continued to recede, official data showed Wednesday.

Weakness in the retail sector could point to slower economic growth in the first quarter of the year. But outside the automotive sector, there were some signs of strength, with consumers snapping up sporting goods, clothing and accessories.

Total retail and food services sales fell 0.1 percent in February, the same decrease recorded in January and December, with consumers plunking down a total of $492 billion for purchases, according to the Commerce Department.

Officials caution that the results are subject to revision and were outside the margin of error. But they still significantly undershot analyst expectations, which instead called for a 0.3 percent increase.

Consumer spending was still four percent above its level in February of last year.

Ian Shepherdson of Pantheon Macroeconomics said the numbers did not reflect the bigger picture, in which the US consumer was in good shape.

“Sales had to correct after the post-hurricane surge in spending last fall on building materials, autos, household appliances and other items lost or damaged by the storms,” he said in a client note.

“The good news now is that mean-reversion is complete, so we’re expecting stronger sales over the next few months.”

Sales of cars and trucks tumbled 0.9 percent for the second month in a row while gas stations had their weakest month since June.

The February slump also extended to sales of furniture, food and beverage stores, electronics, health and personal care items and services and general merchandise. Department stores also sank.

Sales of building materials saw their biggest gain since the post-hurricane reconstruction efforts of September. Non-store retailers like Amazon also had another solid month, gaining one percent over January.

Bars and restaurants likewise posted a modest 0.2 percent increase.

AFP