U.S. retail sales unexpectedly fall in February

Reuters reported that the US Commerce Department said that in February, retail sales had dropped 0.2 percent, instead of the 0.3 rise forecasted. The department said that households cutting back on purchases of furniture, clothing, food and electronics and appliances, as well as building materials and gardening equipment were the chief reason for the decline. On the other hand, the Commerce Department had revised it data for January, showing retail sales increasing 0.7 percent instead of gaining 0.2 percent as previously reported.

Economists polled by Reuters had forecast retail sales rising 0.3 percent in February. Retail sales in February advanced 2.2 percent from a year ago.

As reported in March, delays in processing tax refunds in the middle of the month of February – due to the prolonged government shut-down – created uncertainty.

Reuters wrote that tax refunds had been smaller on average compared to previous years following the revamping of the tax code in January 2018. Cold and wet weather could also have hurt sales.

Analysts’ growth estimates for the January-March quarter remain low - 0.8 percent at an annualized rate. The economy grew at a 2.2 percent rate in the fourth quarter of 2018 after expanding at a 3.4 percent clip in the July-September period.