Source: Zhitong Finance
According to data released by the US Department of Commerce on Thursday, retail sales in the US increased 0.6% month-on-month in February, below expectations of 0.8%. Excluding automobiles, sales increased 0.3%.
After a sharp decline in retail sales in the US at the beginning of this year, the increase was lower than expected, highlighting concerns about the persistence of consumer spending.
Of the 13 industries, 8 recorded growth. Among them, building materials stores and car dealers saw the biggest increase, the biggest increase since May. Spending declined in furniture stores, health and personal care, apparel, and e-commerce stores.
The so-called “control group” sales used to calculate GDP remained unchanged in February after falling in January. The indicator does not include food services, car dealerships, building materials stores, and gas stations, indicating weak economic activity so far in the first quarter.
On the face of it, Thursday's report suggests that as the job market begins to cool down, credit channels become more limited, prices continue to rise, and consumer insight is getting sharper.
Despite this, another report on Thursday showed that the number of people applying for unemployment benefits last week was still at an all-time low, even lower than last year's revised preliminary report.
The Federal Reserve said that a strong job market and stubborn inflation are the reasons for keeping interest rates unchanged for the fifth time in a row at next week's official meeting.
The Federal Reserve's recent Beige Book survey on regional business ties shows that consumers are becoming more sensitive to prices. Other data released this week showed that consumer prices and producer prices surpassed expectations for the second month in a row in February, reflecting a rise in commodity costs after several months of continuous decline.
Although inflation is currently progressing slowly, most economists and business executives expect price pressure to continue to fall, which may help support spending in the short term.
“Anti-inflation was the key word for retail this quarter. This is a good thing for consumers,” Target's chief operating officer and interim chief financial officer Michael Fiddelke said during last week's earnings call.
Retail data mainly reflects purchases of goods, which account for a relatively small share of overall consumer spending. Data to be released later this month will provide more details on inflation-adjusted spending on goods and services in February.
After two months of decline, consumption in restaurants and bars — the only service sector category in the report — showed a rebound, Thursday's data showed. Grocery store revenue fell for the third month in a row.