UNITED States’ retail sales fell less than expected in February, but a sharp downward revision to January’s sales could reignite concerns about the economy’s growth prospects.
Tuesday’s weak report from the Commerce Department bucked the trend of recent labor market data that had suggested the economy remained on solid ground despite some concerns that a recession was looming.
Retail sales dipped 0.1 percent last month as automobile purchases fell and cheaper gasoline undercut receipts at service stations. January’s retail sales were revised down to show a 0.4 percent decline instead of the previously reported 0.2 percent increase.
“Consumers remain cautious and hesitant to spend despite an improving jobs picture and evidence of accelerating wage increases,” said Alan MacEachin, an economist at Navy Federal Credit Union in Vienna, Virginia.
Retail sales excluding automobiles, gasoline, building materials and food services were unchanged after a downwardly revised 0.2 percent increase in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product and were previously reported to have risen 0.6 percent in January.
Economists polled by Reuters had forecast retail sales slipping 0.2 percent and core retail sales rising 0.2 percent in February.
Last month’s weak core retail sales reading, together with January’s modest gain, suggest that consumer spending will probably remain tepid in the first quarter after growing at a 2.0 percent annualized rate in the fourth quarter.
Prices for U.S. government debt rose after the data, while the dollar fell against the euro and yen. U.S. stock index futures were trading lower.