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US retail sales fall broadly in February
[WASHINGTON] US retail sales fell by the most in more than a year in February and the coronavirus outbreak is expected to depress sales in the months ahead, which could strengthen economists' expectations of a consumer-led recession by the second quarter.
The report from the Commerce Department on Tuesday showing a broad decline in sales followed on the heels of the Federal Reserve's decision on Sunday to slash interest rates to near zero, pledge hundreds of billions of dollars in asset purchases and backstop foreign authorities with the offer of cheap dollar financing.
Fed Chair Jerome Powell said the epidemic was having a "profound" impact on the economy.
Retail sales dropped 0.5 per cent last month, the biggest decline since December 2018. Data for January was revised higher to show retail sales accelerating 0.6 per cent instead of rising 0.3 per cent as previously reported. Economists polled by Reuters had forecast retail sales climbing 0.2 per cent in February.
Compared to February last year, retail sales increased 4.3 per cent. Excluding automobiles, gasoline, building materials and food services retail sales were unchanged last month after increasing by an upwardly revised 0.4 per cent in January.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have been unchanged in January.
In February, auto sales decreased 0.9 per cent after rising 0.8 per cent in January. Receipts at service stations tumbled 2.8 per cent, reflecting cheaper gasoline. Sales at electronics and appliance stores declined 1.4 per cent.
Sales at building material stores plunged 1.3 per cent, after being boosted in recent months by unseasonably mild temperatures. Receipts at clothing stores fell 1.2 per cent last month. Online and mail-order retail sales rose 0.7 per cent. That followed a 0.2 per cent gain in January. Receipts at furniture stores slipped 0.4 per cent.
Grocery and healthcare stores sales fell marginally. There was panic buying in late February, which saw shelves at supermarkets, pharmacies and other establishments cleaned out of household essentials, including food and toilet paper.
Sales at restaurants and bars dropped 0.5 per cent, and economists expect sharp declines in the months ahead.