After reporting a substantial increase in U.S. retail sales in the previous month, the Commerce Department released a report on Tuesday showing retail sales pulled back by much more than anticipated in the month of February.
The Commerce Department said retail sales plunged by 3.0 percent in February after soaring by an upwardly revised 7.6 percent in January.
Economists had expected retail sales to dip by 0.5 percent compared to the 5.3 percent spike originally reported for the previous month.
The sharp pullback in retail sales reflected weakness in most categories, including sales by motor vehicle and parts dealers, which plummeted by 4.2 percent in February after surging up by 5.0 percent in January.
Excluding the drop in auto sales, retail sales still tumbled by 2.7 percent in February after skyrocketing by 8.3 percent in January. Ex-auto sales were expected to edge down by 0.1 percent.
Sales by department stores, sporting goods, hobby, musical instrument, and book stores and non-store retailers showed particularly steep declines.
Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, slumped by 3.5 percent in February after spiking by 8.7 percent in the previous month.
Andrew Hunter, Senior US Economist at Capital Economics, said the sharp pullback in retail sales in February “reflects the fading of the boost from December’s fiscal stimulus and disruption caused by the severe winter weather.”
“Regardless, with the next round of even larger stimulus checks already being sent out, we expect spending to see a renewed surge in March,” Hunter added.
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