February retail sales see gains, according to NRF and Department of Commerce
March 13, 2014
While harsh winter weather remained an obstacle, retail sales in February saw gains, according to data released by the National Retail Federation and the United States Department of Commerce today.
Commerce reported that February retail sales at $427.2 billion were up 0.3 percent compared to January and up 1.5 percent compared to February 2013. Total retail sales from December through February are up 2.3 percent annually.
NRF reported that February retail sales, which exclude autos, gas stations, and restaurants, were up 0.2 on a seasonally-adjusted basis from January to February and were up 2.3 percent on an unadjusted basis annually.
“Despite a long and cold winter, consumers continued to persevere and spend in February,” NRF Chief Economist Jack Kleinhenz said in a statement. “This month’s retail sales data is encouraging and above expectations. However neither the jobs nor retail data reflect the fundamental health of the economy. While the weather continues to play tricks on economic forecasts and figures, we expect much-needed clarity come spring as consumers release pent-up demand.”
As previously reported, with retail sales growth still relatively modest, there still remains a mixed bag of signals and headwinds on the economic front, including a slightly declining unemployment rate, improving consumer confidence data, as well as encouraging automotive sales and housing data and difficult winter weather conditions.
These things continue to occur, though, against the backdrop of sluggish GDP growth and general uncertainty regarding the economy.
IHS Global Insight Managing Director, Transportation Advisory Services Charles W. “Chuck” Clowdis said that despite February’s gains in retail sales, there is still a way to go before these types of gains can truly be viewed as progress.
“Consumer spending is still struggling to break into a faster trot. Headwinds from gasoline price increases in the past few weeks have acted to allocate spending to the cost of driving,” he said. “Hopefully better weather and a ‘spring thaw’ will provide confidence and spur consumers to loosen their purse strings.”
Another factor impacting retail sales activity is the inventory-to-sales ratio, which Ben Hackett, founder of maritime consultancy Hackett Associates, told LM remains stubbornly high and can translate into slow retail sales and low consumption.
Other things to keep an eye on, according to Hackett, are declining exports out of China; lower inflation rates, which can potentially lead to deflation, and prices dropping in conjunction with lower consumption as businesses shutter production lines due to fewer sales, which can lead to lower employment levels.
Last month, the NRF said that it expects 2014 retail sales, not including automobiles, gas stations, and restaurants, to head up 4.1 percent compared to 2013, which is ahead of the preliminary 2013 increase of 3.7 percent over 2012. And it also said that the fervent pace of e-commerce activity will continue, with a projected 9-to-12 percent increase in online sales.
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