Economic Report: U.S. retail sales drop 0.5% in February in sign of early damage from coronavirus
The numbers: Sales at U.S. retailers fell in February in what’s likely to be a series of steep declines as the nation battens down the hatches to stop the spread of the coronavirus.
Retail sales slumped 0.5% last month, the government said Friday, suggesting that worries over the coronavirus began to take a bite out of the economy toward the end of the month. That’s the biggest drop in a year.
Economists polled by MarketWatch had expected a 0.1% increase.
Partly mitigating the poor February results was a revision showing sales in January rose a stronger 0.6% instead of 0.3% as originally reported.
What happened: Sales fell nearly 3% at gas stations, reflecting a big drop in the price of oil. Sales also fell sharply at electronic and appliance stores, auto dealers, home centers and clothing outlets.
Bars and restaurants also posted a 05% decline in sales that’s only going to get worse. Some states have orders them to close and only serve takeout.
Internet retailers were the only ones to report a solid increase in sales. Grocery-store receipts were basically flat.
Big picture: Retail sales are likely to tumble in the next few months to recession levels as many states imposing restrictions on store openings and hours. Americans are also staying away from lots of retail stores, though they are flocking to supermarkets to stock up and buying more goods online.
What they are saying? “Unfortunately the declines in February are likely to be a rounding error compared with what we will see in March, but I would characterize the softening last month as partly a reflection of the early effects of coronavirus on consumer behavior and partly as a payback for the rigorous January performance,” said Stephen Stanley, chief economist of Amherst Pierpont Securities.
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