Retailers may be feeling effects of slower tax refunds
U.S. shoppers spent more cautiously in February despite the mild weather, possibly because of the slower pace of tax refunds.
Retail sales increased 0.1%, matching economists’ estimates. A measure of core sales — which excludes the volatile sectors of autos, gasoline, food services and building materials — rose 0.1%, below economists’ 0.2% forecast.
Retail sales gains for January were revised up to a robust 0.6% from 0.4% as consumer purchases advanced sharply that month across a wide range of categories. The increase in core sales was upgraded to 0.8% from 0.4%.
“The upshot is that these figures should prompt a round of modest upward revisions to firstquarter GDP growth,” economist Paul Ashworth of Capital Economics wrote in a note to clients.
Delays in tax refunds early in 2017 could have curtailed spending last month, Nomura economist Lewis Alexander said. Barclays economist Rob Martin said that could shift some purchases into the second quarter. At the same time, Alexander had figured unusually warm winter weather spurred some additional shopping in February.
Sales rose 0.7% at furniture stores, 1.8% at building material outlets, 0.7% at health and personal care stores and 1.2% online.
But gasoline station sales fell 0.6% on lower prices while auto sales slipped 0.2%. Sales declined 0.5% at clothing stores, 0.4% at sporting good shops, 2.8% at electronics and appliance stores, 0.1% at restaurants and bars and 1.1% at department stores. Consumers are still poised to drive economic growth this year because they continue to benefit from healthy job and income growth, and record home and stock prices.
The Federal Reserve on Wednesday raised its benchmark short-term rate by a quarter percentage point to a range of 0.75% to 1%. It also kept its forecast for two more such hikes this year.