US retail sales miss forecasts as consumer spending slows
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The news: US retail sales for February came in lower than expected after a deeper pullback in January, adding to concerns about the strength of consumer spending.
The numbers: The US Census Bureau’s figures for February saw retail sales rise 0.6%, after falling a revised 1.1% (from 0.8%) in January.
The context: Sales were up across eight out of 13 categories during February, driven largely by higher fuel, auto sales and a rebound in building materials which had been impacted by bad weather in January. However, sales across furniture, grocery, clothing and online retailers were down during the period.
The data suggests a softening in discretionary spending, as higher prices continue to impact households and the labour market begins to cool.
US Producer Prices for February also came in higher than expected on Thursday, seeing an increase of 0.6% from January and up 1.6% from a year earlier. The figures were driven by higher food and fuel costs, and underscore signs of persistent inflation, adding to expectations that the US Federal Reserve will hold rates steady for a fifth consecutive meeting when it meets next week.
The sources: US Census Bureau Retail Sales data, Bloomberg
