WASHINGTON: US retail sales unexpectedly fell in February, the latest sign economic growth has shifted into low gear as stimulus from US$1.5 trillion in tax cuts and increased government spending fades.
The Commerce Department said on Monday retail sales dropped 0.2 per cent as households cut back on purchases of furniture, clothing, food and electronics and appliances, as well as building materials and gardening equipment. Data for January was revised higher to show retail sales increasing 0.7 per cent instead of gaining 0.2 per cent as previously reported, report agencies.Economists polled by Reuters had forecast retail sales rising 0.3 per cent in February. Retail sales in February advanced 2.2 per cent from a year ago.
The surprise drop in sales in February could partly reflect delays in processing tax refunds in the middle of the month. Tax refunds have also been smaller on average compared to prior years following the revamping of the tax code in January 2018. Cold and wet weather could also have hurt sales.
The February retail sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan 25. March's retail sales report, which was scheduled for publication on April 16, will be released on April 18.
Excluding automobiles, gasoline, building materials and food services, retail sales fell 0.2 per cent in February after an upwardly revised 1.7 per cent surge in January.