Retail sales last month were weighed down by a 4.4 percent drop in the value of sales at service stations. Retail trade sales fell 0.3 percent on the month, and 2.7 percent on the year.
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Business inventories in the US saw a modest uptick in the month of January, according to a report released by the Commerce Department on Tuesday.
But the months’ declines are due in large part to falling gas prices that didn’t bottom out until mid-February.
Economists polled by Reuters had forecast retail sales slipping 0.2 percent and core retail sales rising 0.2 percent in February. The decreases were partly offset by a 0.3 percent increase in sales by manufacturers.
Economists had expected inventories to come in unchanged compared to the 0.1 percent uptick originally reported for the previous month.
The small rise in inventories reflected gains of 0.3 percent in stockpiles held by wholesalers as well as a 0.3 percent gain in retail stockpiles. The sharp downward revision for January points to a consumer who remains cautious despite the windfall from low gas prices raises and questions about the level of economic growth in the first quarter.
The back-to-back monthly decline in retail sales pointed to some weakness in consumer spending, the main driver of the United States economy that accounts for two thirds of activity.
Retail sales dipped 0.1 percent last month as automobile purchases fell and cheaper gasoline undercut receipts at service stations.
“The economy’s engines are not going into reverse… but at the moment, it is hard to see GDP with a 2 percent handle”. Prices for USA government debt were marginally higher, while the dollar was largely unchanged against a basket of currencies. That was “the best growth in a year, although severe weather restrained sales last year”, said Scott Hoyt of Moody’s Analytics.
Businesses accumulated record inventory in the first half of 2015, outpacing demand. Sales rose 1.6% on the month and 12.2% on the year.
One reason sales and inventories look so weak is the big drop in energy prices over the past year.
Sales were generally weak across the board: Auto dealers, electronics and appliance stores, grocery stores and department stores all reported lower sales.
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Receipts rose at restaurants and bars as well as at sporting goods and hobby stores, showing that consumers still have an appetite for discretionary spending.
