U.S. retail sales decline for third straight month


In volume terms, retail sales slid 0.7% monthly and by 1.9% yearly in January.

The Commerce Department said retail sales slipped 0.1 percent last month.

By category: furniture sales fell 0.8% from January and rose 3.3% year over year; electronics and appliance sales fell 0.1% from January and rose 4.5% year over year; department store sales fell 0.9% from January and were flat year over year; and apparel sales rose 0.4% from January and 4.9% year over year.

Retail trade sales decreased 0.1% from January and 4.2% from previous year.

A month-over-month drop in auto sales, which were down 0.9 percent, accounted for all of the slight monthly decline in total retail sales.

As a result of the weak core retail sales at the start of the year, economists lowered their first-quarter GDP growth estimates.

Consumer spending, which accounts for more than two-thirds of USA economic activity, appears to have slowed at the start of the year after accelerating at a 3.8 percent annualized rate in the fourth quarter.

Ховежер, the cost remains supported by the strong labor market, which, according to the Federal Reserve, is close to full employment.

As the economy continued to show signs of improvement, February stood to gain at retail.

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Consumer spending could also get a lift from a $1.5-trillion income tax cut package.

US retail sales fell for a third straight month in February as households cut back on purchases of motor vehicles and other big-ticket items, prompting analysts to downgrade their first-quarter economic growth forecasts.

"There's clearly some buyers' strike going on in the last couple of months, but we know that consumer fundamentals are incredibly sound", said Tom Porcelli, chief United States economist at RBC Capital Markets in NY.

These numbers exclude automobiles, gasoline stations and restaurants. Producer prices, which show inflation before it reaches consumers, have risen 2.8 percent over the past year.

Clothing and clothing accessory stores were up 5.2 percent year-over-year and up 0.4 percent from January seasonally adjusted.

But there were some pockets of strength.

"We firmly believe that core consumer price inflation is rising and the March CPI report will be the acid test of that hypothesis", said John Ryding, chief economist at RDQ Economics in NY. Non-store sales rose 1% from January and 10.1% year over year.

The Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, has undershot its target since May 2012. The sales in restaurants and bars rose by 0.2%.