ARLINGTON, Va.—Total retail sales decreased 0.2% in February, and consumer spending could remain low this year, which could impact overall economic growth, according to one analyst.
"Consumer spending continues to disappoint … average growth since November is negative 0.3%," said NAFCU Chief Economist and Vice President of Research Curt Long in a NAFCU Macro Data Flash report. "The decline in gas prices over that time explains some of the weakness, but even after excluding the volatile auto and gas sales segment, core sales growth has been flat over that time."
Year-over-year growth in retail sales was 2.2% in February, which was down from 2.8% in January. Core retail sales increased by 2.9% from a year ago, while auto and gas sales grew by 0.7%.
Sagging Segments
Results among the major retail segments were generally poor in February. The biggest gains came from gas stations (+1%), nonstore retailers (+0.9%) and motor vehicle and parts dealers (+0.7%). The largest declines during the month were among building material and supply stores (-4.4%), electronics and appliance stores (-1.3%) and miscellaneous store retailers (-1.6%), Long said.
"Wage growth is improving, which remains the biggest reason for optimism, but the future outlook for household spending depends heavily on the labor market. Our expectation is that consumer spending growth remains low this year, which will weigh on overall GDP growth," Long added.