Retail sales fell 3% in February after Jan. jump

Retail sales slid in February after a jump the month before, the Commerce Department said Tuesday, putting a spotlight on the effect of stimulus money on consumer spending, which is likely to proceed in fits and starts as the economy recovers.

Sales for February dropped 3%, the government’s data showed. The decline was sharper than some economists had expected, but sales for the month were still higher than a year before, when the pandemic began to squeeze the economy.

The data suggests that the recovery in consumer spending is likely to be bumpy as the retail sector recovers from shifts in consumer habits and a new round of stimulus payments arrives in Americans’ bank accounts. Retailers saw largely uneven sales for the better part of last year, as consumers flocked to big-box chains and grocery stores and spent less at many apparel retailers and restaurants. Balancing out those categories is likely to take a combination of stimulus money, vaccinations, improvements in unemployment numbers and warm weather.

“Going forward, the new stimulus checks that are going out as we speak are definitely going to be a positive for retail sales in March and through April,” said Mickey Chadha, a retail analyst at Moody’s Investors Service. “All indications are, as the vaccines roll out through the country and the pandemic gets under control, this capacity to spend is only going to fuel further sales in retail.”

The drop in February comes after sales in January surged by 7.6% — a gain likely fueled by stimulus checks that were deposited at the end of last year.