Retail sales in the United States slid a little in February, signaling a downshift in economic growth for the year as the $1.5 trillion tax cut stimulus and government spending boost starts to fade. The weak US Department of Commerce report, released Monday, adds to a growing roster of soft data, which includes slowing housing starts and manufacturing production. And this data has led economists to suggest a sharp downturn is looming this quarter.
Some economists had forecast that retail sales would grow 0.3 percent, in February. As such, analysts say the surprise sales numbers drop in February might be a result of delays in the processing of tax returns. Of course, those who have filed and received their return already know that returns, this year, have been significantly smaller than prior years. And, as always, cold and wet weather throughout the country could have also contributed to slowing sales.
In addition, analysts propose the loss of momentum reflects slower global growth coupled with higher interest rates and underlined by uncertainty caused by Britain’s departure from the European Union and the US-China trade war. Indeed, the Federal Reserve’s decision to suddenly stop its three-year campaign to restrict monetary policy, last month.
Overall, then, the US central bank (FED) has stopped projecting interest rate hikes for the rest of the year after issuing borrowing increases fourfold over 2018.
All that in mind, retail sales fell 0.2 percent, finding household cutbacks in just about every retail sector. This includes not only appliances and electronics, but clothing and furniture as well; even food saw a drop. In addition, specialty sectors like building materials and gardening equipment saw decline. This also comes with revisions on January’s data, which showed a 0.7 boost in retail sales, which is 0.5 percent higher than had been reported previously.
It might also be worth noting that February’s retail sales report comes at a significant delay thanks to the 35-day partial federal government shutdown, which finally ended on January 25. Actually, this has also caused a delay in March’s report, which will be released on April 18th, instead of its scheduled April 16th.