Inclement weather and low wage gains slowed consumer retail spending in February, which is the third straight month of decline. February showed a .6% decline, after a .8% drop in January. Sales declined in nine of thirteen major categories, led by auto dealers and building supply merchants. The 2.3% drop in purchases at building-material stores was the biggest since May 2012.
“Consumers aren’t really spending as much of their savings from lower gasoline prices as expected,” Tom Simons, an economist at Jefferies LLC in New York, said before the report. “It’s the bad weather, consumers not spending the fuel savings as much as expected, and subdued wage growth.”
One standout in February was non-store retailers, which includes online retailers. Purchases showed at 2.2% increase in demand, the largest since March 2014.
Household consumption, which accounts for almost 70 percent of the economy, is projected by economists to expand this quarter. It grew at a 4.2 percent annualized rate in the final quarter of 2014, the most since the last three months of 2010, according to revised figures from the Commerce Department.
Source: Bloomberg Business
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