After a very strong January, U.S. retail sales fell slightly in February, the Department of Commerce reported Wednesday. U.S. retail sales declined .4 percent in February to $698 billion, slightly higher than economists’ predictions of a .3 percent drop, according to estimates from the financial solutions firm Refinitiv. However, sales are still 5.4 percent higher than at the same time last year.
Spending on categories like durables and food services came down after strong increases the month before, Morning Consult analyst Kayla Bruun said. The report showed customers also reduced their spending in the areas of auto dealers, department stores, and restaurants and bars.
Total Retail’s Take: Morning Consult analyst Claire Tassin said the Department of Commerce report reflects a pullback in consumer spending after a spike in January.
“The longer-term trend shows that retail growth is bolstered by inflation, and shoppers are pulling back on discretionary spending with the strongest impacts on department stores and home furnishings retailers,” Tassin said. “This is consistent with what we heard in retailers’ earnings reports in recent weeks, as essentials take priority in consumers’ budgets.”
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