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First Cut: February retail sales disappoint, but upward revisions to January draw some of the sting

Retail and food sales in February dipped 0.2% from January, but the January data had an upward revision to up 0.7% (previously up 0.2%). Excluding sales of motor vehicles, month-over-month saw a 0.4% decrease in February after up 1.4% in January (previously up 0.9%). While the February data is below expectations, the January revisions should draw some of the sting from the disappointing report.

Most of the support for sales there was in February came from an increase of 1.0% at gasoline service stations where the price at the pump was higher, a gain of 0.7% for sales at auto and other motor vehicle dealers, and nonstore retailers — which includes outlets like fuel oil suppliers as well as e-stores — which were up 0.9%. Building materials fell 4.4%.

The “core” retail sales — sales excluding gasoline, auto dealers, and building materials — were down 0.2% in February from January after up 1.4% in January (previously up 1.0%).

Retail activity in February may have felt the impact of severe winter weather events and also the late start of the arrival of tax refunds. Milder weather in March and a wave of tax refunds arriving should help sales for the coming month’s data when it is released at 8:30 ET on Thursday, April 18. At that time the release schedule will be back on track after the delays related to the government shutdown. The March data should also get a bit of a boost from continued gains in gasoline prices and possibly stronger sales of motor vehicles. The late timing of Easter and Passover (in the third weekend of April) will make year-over-year comparisons more difficult.

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