Consumer spending index and data on retail sales reporting. (Photo: Reuters)
Retail sales in the U.S. unexpectedly fell for a third straight month in February, a sign first quarter growth could be far weaker than initially expected. The Commerce Department said on Thursday retail sales fell 0.6 percent after falling 0.8 percent in January.
The decline in sales last month was across-the-board, and this month marks the first time since 2012 that sales had dropped for three consecutive months. Economists polled by Reuters had forecast retail sales increasing 0.3 percent last month.
Excluding automobiles, retail sales for gasoline, building materials and food services were unchanged following a 0.1 percent decline the month prior. The so-called core retail sales most closely reflects the consumer spending component of gross domestic product.
The latest data indicates a sharp slowdown in consumer spending in the first quarter, as economists had expected core retail sales would rise 0.4 percent. First-quarter growth forecasts currently range between an annualized pace of 1.7 percent and 2.5 percent, though the report will likely warrant another downward revision.
Meanwhile, the economy grew at a mediocre 2.2 percent pace in the fourth quarter.
In February, automobile sales tumbled 2.5 percent. Sales at clothing stores were flat. Receipts at building material and garden equipment stores fell 2.3 percent and sales at restaurants and bars slipped 0.6 percent.
There were also declines in furniture and electronic and appliances sales, while online store sales actually increased 2.2 percent. Sales at sporting goods and hobby shops increased 2.3 percent.
The average 9-cent rising cost of gasoline helped service station receipts, who saw a 1.5 percent gain, the first gain since May.
