HomeFinancial MarketsRetail Sales Fall In February As Producer Inflation Slows

Retail Sales Fall In February As Producer Inflation Slows

U.S. retail sales fell by 0.4% in February; a decline that is expected to have come due to the previous month’s outsized increase. Despite the decline, the underlying sales momentum remained strong, with the economy continuing to expand. January retail sales data was also revised higher to show a 3.2% increase as opposed to the previous 3% rise.

“American consumers still appear to be spending at a rate that will make the Fed uncomfortable with the inflation outlook, warranting a further tap on the brakes,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto observed.

February’s decline in month-over-month retail sales was driven by a 1.8% drop in motor vehicle sales, while furniture sales sunk by 2.5%. Receipts at clothing outlets dropped by 0.8%.

The recent rise in spending is largely attributed to a relatively high labor market, which is generating a higher growth rate. Consumers are also benefitting from higher savings, with the Federal Reserve embracing a tight fiscal policy during the COVID-19 crisis.

PCE Inflation Report Threatens to Delay Fed Rate Cuts

Investors are bracing for the release of the Personal Consumption Expenditures (PCE) report on Thursday, with markets concerned that hotter-than-expected inflation data could further...

U.S. Futures Decline Ahead of Inflation Report

Futures on the New York Stock Exchange declined on Wednesday ahead of a crucial inflation report that is expected to provide insight into the...

Stocks Hold Steady Ahead of Inflation Report

U.S. equities remained largely muted on Tuesday after reaching all-time highs as investors awaited the release of a crucial inflation report. The PCE index,...