Financial News: U.S. Retail Sales Rebound In February But Much

U.S. Retail Sales Rebound In February But Much Less Than Expected

(RTTNews) - After reporting a notable decrease by U.S. retail sales in the previous month, the Commerce Department released a report on Monday showing a modest rebound by retail sales in the month of February.

The Commerce Department said retail sales rose by 0.2 percent in February after tumbling by a revised 1.2 percent in January.

Economists had expected retail sales to climb by 0.7 percent compared to the 0.9 percent slump originally reported for the previous month.

"The February retail sales report painted a cautious picture of consumer spending following the cold-weather plunge in January," said Nationwide Chief Economist Kathy Bostjancic. "Given that spending on services accounts for about two-thirds of all real consumer spending, we now see real consumer spending on pace to rise just 1.4% this quarter (following the 4.2% surge in Q4)." She added, "A softening in consumer spending this quarter was to be expected following consumers rush to purchase goods last quarter ahead of looming tariffs, but the sharp deterioration in consumer confidence levels related to the tariffs and decline in the stock market is also weighing on spending activity."

The uptick by retail sales came despite a continued decrease in sales by motor vehicle and parts dealers, which fell by 0.4 percent in February after plunging by 3.7 percent in January.

Excluding the drop in sales by motor vehicle and parts dealers, retail sales increased by 0.3 percent in February after falling by 0.6 percent in January. Ex-auto sales were expected to rise by 0.5 percent.

The modest increase by ex-auto sales partly reflected a significant rebound by sales by non-store retailers, which surged by 2.4 percent in February after tumbling by 2.4 percent in January.

Sales by health and personal care stores also saw considerable growth, while sales by department stores, food services and drinking places and gas stations fell sharply.

Meanwhile, the report said core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.0 percent in February after slumping by 1.0 percent in January.

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