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US retail sales dip in February; prior month weak
[WASHINGTON] US retail sales fell less than expected in February, but a sharp downward revision to January's sales could reignite concerns about the economy's growth prospects.
The Commerce Department said on Tuesday retail sales dipped 0.1 per cent last month as automobile purchases slowed and cheaper gasoline undercut receipts at service stations.
January's sales were revised to show a 0.4 per cent decline instead of the previously reported 0.2 per cent increase. Economists polled by Reuters had forecast retail sales slipping 0.2 per cent in February.
Retail sales excluding automobiles, gasoline, building materials and food services were unchanged after a downwardly revised 0.2 per cent increase in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product and were previously reported to have risen 0.6 per cent in January.
Last month's weak reading, together with January's modest gain, suggest that consumer spending will probably remain tepid in the first quarter after growing at a 2.0 per cent annualized rate in the fourth quarter.
The report came as Federal Reserve officials prepared to gather for a two-day policy meeting. The US central bank is expected to leave interest rates unchanged as policymakers monitor developments on global financial markets, domestic inflation and the labor market.
The Fed hiked its benchmark overnight interest rate in December for the first time in nearly a decade.
A 4.4 per cent drop in the value of sales at service stations weighed on retail sales last month. Gasoline prices dropped 9 per cent in February, according to the US Energy Information Administration, as oil prices fell further.
Retail sales were also hurt by a 0.2 per cent fall in sales at auto dealerships. Auto sales declined 0.2 per cent in January.
Clothing store sales rose 0.9 per cent last month. Receipts at building materials and garden equipment stores gained 1.6 per cent, while sales at furniture stores fell 0.5 per cent.
Sales at sporting goods and hobby stores rose 1.2 per cent and sales at restaurants and bars increased 1.0 per cent. Receipts at electronics and appliance stores slipped 0.1 per cent. Online store sales dropped 0.2 per cent.