Home » Economy » Retail sales slip 0.4% in February as consumers pull back on spending
Retail sales slip 0.4% in February as consumers pull back on spending
Supercore inflation isn’t providing the economy any relief: Omair Sharif
Inflation Insights founder Omair Sharif and Kaltbaum Capital Management founder Gary Kaltbaum react to the hotter-than-expected January CPI report and what it means for future Fed rate hikes on ‘The Claman Countdown.’
Americans pulled back on spending at retail stores in February as demand cooled in the face of stubborn inflation and high interest rates.
Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, fell 0.4% in February, the Commerce Department said Wednesday. That is slightly below the 0.3% decline projected by Refinitiv economists and a marked drop from January, when sales rose 3.3%.
Consumers spent less at restaurants, auto dealerships, furniture and home stores and department stores, and more on necessities like groceries. Excluding spending on autos – which is often volatile – retail sales declined 0.1% in February.
"Recession fears are rising as consumers will likely retrench after the scares within the banking sector," said Jeffrey Roach, chief economist for LPL Financial. "The trajectory of consumer spending weakened in February and now with volatile short term borrowing costs, the economy may soon tip into recession. Although our base case has the Fed hiking rates next week, the turmoil in short-term dollar borrowing may force the Fed to pause."