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Economy in Brief

U.S. Retail Sales Are Held Back by Severe Winter Weather in February
by Tom Moeller  March 16, 2021

• Weakness is broad-based.

• Decline follows January spending boost from stimulus checks.

Total retail sales including food service and drinking establishments declined 3.0% (+6.3% y/y) during February after rising 7.6% in January, which was strengthened by a second round of government stimulus checks. The January gain was revised from 5.3%. The Action Economics Forecast Survey expected a 0.3% slip. Retail sales excluding motor vehicles and parts declined 2.7% last month (+5.5% y/y) after surging 8.3% in January, revised from 5.9%. Sales have fallen in four of the last five months. A 0.3% February rise had been expected.

Sales in the retail control group, which excludes autos, gas stations, building materials and food services, fell 3.5% last month (+10.2% y/y) after surging 8.7% in January, revised from 6.0%.

Motor vehicle purchases declined 4.2% in February (+9.2% y/y) following a 5.0% January rise. The decline compares to a 5.6% weakening (-6.7% y/y) in unit sales of light vehicles. Nonstore retail sales were off 5.4% (+25.9% y/y) after surging 16.8% in January. General merchandise store sales were off 5.4% (+4.2% y/y), the fourth decline in five months. Department store sales declined 8.4% (-14.5% y/y) after surging 20.6% in January. Clothing & accessory store sales fell 2.8% (-11.3% y/y) after two months of firm increase. Furniture & home furnishings sales weakened 3.8% (+8.9% y/y) following a 12.9% jump while sales of electronics & appliances eased 1.9% (-3.1% y/y) after surging 16.7% in January. Sporting goods, hobby and book store sales declined 7.5% (+15.4% y/y) after rising 10.3%.

Building materials sales fell 3.0% (+14.2% y/y) with the severe weather after increasing 4.9% in January. Reflecting higher prices, gasoline service station sales rose 3.6% (1.4% y/y), the third straight month of strong increase.

In the nondiscretionary sales categories, food & beverage store sales held steady in February (11.7% y/y) after gaining 2.4% in the prior month. Health personal care store sales eased 1.3% (+5.4% y/y) following a 2.3% rise.

Sales at restaurants and drinking establishments posted a 2.5% decline (-17.0% y/y) in February after rising 9.1% in January.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

Did the Federal Reserve Anchor Inflation Expectations Too Low? from the Federal Reserve Bank of Kansas City is available here.

Retail Spending (% chg) Feb Jan Dec Feb 0Y/Y 2020 2019 2018
Total Retail Sales & Food Services -3.0 7.6 -1.3 6.3 0.4 3.5 4.4
  Excluding Autos -2.7 8.3 -2.1 5.5 0.2 3.5 5.2
Retail Sales -3.1 7.4 -0.9 9.5 3.2 3.4 4.2
 Retail Less Autos -2.7 8.1 -1.7 9.6 3.8 3.3 5.1
  Motor Vehicle & Parts -4.2 5.0 1.8 9.2 1.0 3.7 1.4
  Food & Beverage Stores 0.0 2.4 -1.6 11.7 11.1 2.5 2.9
  Gasoline Service Stations 3.6 5.9 7.5 1.4 -15.6 -0.5 9.3
Food Service & Drinking Places -2.5 9.1 -4.8 -17.0 -19.3 4.6 5.8
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