Retail sales in US start 2015 on weak note

Weather deterred consumers

RECORD cold in parts of the US chilled retail sales in February as the world’s largest economy began the year on a weak footing.

Purchases unexpectedly dropped 0.6 percent, a third consecutive decline, Commerce Department figures showed yesterday. The median forecast of 86 economists surveyed by Bloomberg called for a 0.3 percent gain. The decrease was broad-based, with nine of 13 major categories retreating.

Frigid temperatures and snow probably contributed to slumping demand at vehicle dealers, building material merchants and department stores, opening the possibility for a rebound this month. Still, sluggish wage increases may also be playing a role by prompting Americans to use the windfall from cheaper fuel to build up savings or pay down debt.

“It looks like a big weather effect here,” said Carl Riccadonna, Bloomberg Intelligence chief US economist, noting the declines in weather-sensitive categories including apparel, restaurants, building materials and vehicles. “A lot of February data is going to look muddy. This is just a blip. The consumer is just fine.”

Other reports yesterday showed fewer Americans than forecast filed claims for jobless benefits last week and the cost of imported goods rose in February as fuel prices rebounded.

Retail sales estimates in the Bloomberg survey ranged from a decline of 0.2 percent to an advance of 0.7 percent. The January figure was unrevised, showing a 0.8 percent drop.

Bad weather also probably a key issue in depressing sales last month.

The hit from inclement weather was reflected in results at car companies. Ford Motor’s light vehicle sales slipped 2 percent, while other top vehicle makers reported smaller gains than analysts had estimated as the frigid temperatures slowed showroom traffic. The weakness was not too much of a concern, industry officials said.

“We go through this every year,” Erich Merkle, Ford’s sales analyst, said on a March 3 conference call with analysts. “It’s really hard to hang any hats at this point on January and February.”

The Commerce Department report showed sales declined 2.5 percent at vehicle dealers, the most since January 2014, when snow also blanketed large swathes of the US.

Retail sales, excluding vehicles, decreased 0.1 percent, the report showed. They were projected to rise 0.5 percent, according to the Bloomberg survey median.

The 2.3 percent drop in purchases at building-material stores was the biggest since May 2012.

One standout last month was non-store retailers, which includes online retailers. Purchases showed a 2.2 percent hike in demand, the largest since March 2014. That also points to a weather influence as Americans shopped from their homes.