US Retail Spending Dropped 0.5 Pct. In Feb.

US Retail Spending Dropped 0.5 Pct. In Feb.

As consumer spending started to decelerate prior to COVID-19 containment measures, U.S. retail sales declined last month in the biggest drop in a year. Commerce Department data indicated that the value of overall sales decreased 0.5 percent from the month before following a 0.6 percent rise in January, Bloomberg reported. The median projection in a survey had forecasted an increase of 0.2 percent.

Supermarket sales, for their part, dropped 0.1 percent following a decrease of 0.2 percent. Automobile dealer spending declined 0.9 percent. And retail sales, with the exclusion of fuel and automobiles, fell 0.2 percent from the month before in comparison with forecasts for an increase.

“Control group” sales, which are seen by some analysts as a more reliable indicator of demand from shoppers, didn’t move much in comparison to forecasts for an increase of 0.4 percent. The gauge does not include car dealers, food services, fuel stations or building materials stores. Personal spending numbers are due at the conclusion of March.

Numbers from this month forward are likely to indicate a negative impact on many verticals, with the cessation of restaurants, sports and conferences.

Amherst Pierpont Securities Chief Economist Stephen Stanley said, according to MarketWatch, “Unfortunately, the declines in February are likely to be a rounding error compared with what we will see in March, but I would characterize the softening last month as partly a reflection of the early effects of coronavirus on consumer behavior and partly as a payback for the rigorous January performance.”

As previously reported, retail sales increased a seasonally adjusted 0.3 percent in January from December. Fuel sales dropped by 0.5 percent in the month, while auto sales increased 0.2 percent from December. Clothing store sales dropped 3.1 percent from December, and sales at healthcare as well as electronics stores registered steep declines. Sales at building material, furniture and general merchandise stores strongly increased, which could have been due to the mild weather in much of the nation.