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Home / Business / US retail sales are unexpectedly falling as the economy slows down by Reuters

US retail sales are unexpectedly falling as the economy slows down by Reuters



© Reuters. FILE PHOTO: People shop at Macy's department store in New York

By Lucia Mutikani

WASHINGTON (Reuters) – The US retail market fell unexpectedly in February, the latest econo- mic economic growth has shifted to low equipment such as stimulus from $ 1 , 5 trillion in tax cuts and increased public spending disappear.

However, there was some encouraging news about the economy. Other reports on Monday showed a production activity pickup in March and the third fast monthly increase in construction spending in February. The risk of economic growth in the first quarter remains attracted to the downside.

The loss of momentum also reflects higher interest rates, weakening global growth, Washington's trade war with China, and uncertainty over Britain's departure from the EU. 1

9659004] These factors contributed to the Federal Reserve's decision last month to suddenly end its three-year campaign to tighten monetary policy. The US Federal Reserve left forecasts for interest rate hikes this year after rising borrowing costs four times in 2018. "The consumer is lost in the woods, and this gives a gloomy economic outlook this year if they do not find their way," says Chris Rupkey, chief economist at MUFG in New York. "The Fed was wise to move to the sidelines."

The retail market declined by 0.2 percent as households declined the purchase of furniture, clothing, food and electronics and appliances, as well as building materials and gardening equipment. January was revised higher to show that sales increased 0.7 percent instead of increasing 0.2 percent as previously reported

Economists asked by Reuters, had forecast that retail sales rose 0.3 percent in February. Retail sales in February increased by 2.2 per cent from a year ago.

Surprisingly, sales in February may partly reflect delays in the treatment of tax repayment in the middle of the month. The directorate departments have also been less on average compared to previous years after the review of the tax code in January 2018. Cold and wet weather could also have damaged sales.

February retail report was delayed by a 35-day partial closure of the federal government that closed on 25 January. March's retail report, which was scheduled for publication on April 16, will be released on April 18.

The dollar traded lower against a basket of currencies, while government bond prices were down. US stocks rose.

Excluding cars, gasoline, building materials and food, retail sales fell by 0.2 per cent in February following an upward 1.7 per cent increase in January. These so-called core details correspond most closely to the consumption expenditure component of gross domestic product.

DEMAND WEAKENING

They were previously reported to have asked 1.1 percent in January. Consumer spending accounts for more than two thirds of economic activity. The sharp upward revision to core retail in January was insufficient to reverse December's over 2.0 percent drop, and expectations of weak GDP growth in the first quarter intact.

Growth estimates for the January-March quarter are as low as a 0.8 percent annual interest rate. The economy grew by 2.2 per cent in the fourth quarter, having grown by a 3.4 per cent cut in the July-September period.

But green shots are emerging in some sectors of the economy. In a separate report on Monday, the Department of Supply Management reported that the index for national factory activity rose to a reading of 55.3 in March from 54.2 in February, which had marked the lowest level since November 2016.

Reading was a bit over Expectations to 54.5 from a Reuters survey of 69 economists. A reading over 50 indicates expansion in the production sector, and a reading below 50 indicates contraction.

Another report from the Ministry of Commerce showed that construction spending increased 1.0 percent to a nine-month high in February after increasing 2.5 percent in January.

February retail report showed revenue on building materials and garden equipment and supplies retailers tumbled 4.4 percent, the largest decline since April 2012. Purchasing at clothing stores fell 0.4 percent and those at furniture outlets dropped 0.5 percent.

Sales in food and beverage stores decreased by 1.2 per cent, the largest decline since February 2009. Deposits at electronics and appliances stores fell 1.3 per cent, the largest decline since May 2017.

But consumers bought more motor vehicles, with sales of car dealers at 0.7 per cent after falling 1.9 per cent in January. Households also spent more on gas stations, which probably reflects higher gasoline prices.

Web and mail order sales rose 0.9 percent. Sales in restaurants and bars increased by 0.1 percent, and expenses for hobby, musical instruments and bookstores increased 0.5 percent.

Slow demand was highlighted by a fourth report from the Commerce Department showing that business inventory rose 0.8 percent in January.


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