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Retail Sales: February Decline Follows Upwardly Revised Jan.

March 17, 2020

Bottom Line: Total retail spending fell in February fell as gasoline prices fell, but January spending was revised sharply higher. Core retail sales slipped and were led by gains as building materials and garden stores saw slower sales -- this was somewhat surprising given the more robust housing data we had seen amid better weather in February. While gasoline is a volatile component, both overall and core retail sales were still increasing on a year over year basis. Core Sales ex-gasoline stations and ex-building materials during January and February were modestly above their Q4 averages, suggesting that real consumer spending continued to add positively in the first two months of Q1 GDP. Online sales growth remained stable and will likely see gains amid the coronavirus self-quarantines in March. At the headline level, food store sales will be stronger, but sharply lower gasoline sales will offset that due to both lower prices and volume. Most other segments will fall dramatically, led by dining out, which outside of nonstore sales was the most substantial growth segment of retail sales for several years now.

Retail Sales FELL by 0.5% in February, compared with the market consensus for an increase of 0.3%.

The January estimate was revised from 0.26% to 0.62%. Retail sales are now 4.3% ABOVE their year-ago level; just a year ago, the year over year growth rate was 2.2%. Spending at motor vehicle dealers fell by 0.9%.

Core Retail Sales FELL by -0.4%, compared with the market consensus for an increase of 0.3%. The January estimate was revised lower from 0.75% to 0.58%. Core retail sales are now 4.2% ABOVE their year-ago level; just a year ago, the year over year growth rate was 2.2%.

  • In February, gains at nonstore retailers (+0.7%), miscellaneous retailers (+1.4%), grocery stores (+0.0%), sporting goods, hobbies, etc. (+0.1%). were more than offset by declines in gasoline stations, primarily due to low gasoline prices (-2.8%), building materials (-1.3%), clothing stores (-1.2%), electronic and appliance stores (-1.4%.)
Core Retail Sales ex Gasoline FELL by 0.15% and are now 4.4% ABOVE their year-ago level; just a year ago, the year over year growth rate was a moderate 2.6%.

Article by Contingent Macro Advisors