After reporting a sharp increase in U.S. retail sales in the previous month, the Commerce Department released a report on Wednesday showing sales pulled back by slightly more than expected in the month of February.
The Commerce Department said retail sales fell by 0.4 percent in February after spiking by an upwardly revised 3.2 percent in January.
Economists had expected retail sales to decrease by 0.3 percent compared to the 3.0 percent surge originally reported for the previous month.
“Retail sales took a step back in February, but not enough to signal a major deterioration in consumers’ willingness to spend,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “Momentum may stay upbeat in the very near term, but we expect consumer spending to weaken later this year as income gains soften, excess savings run dry, borrowing costs rise, and inflation stays elevated.”
The decrease in retail sales largely reflected a sharp pullback in sales by motor vehicle and parts dealers, which tumbled by 1.8 percent in February after soaring by 7.1 percent in January.
Excluding the steep drop in sales by motor vehicle and parts dealers, retail sales edged down by 0.1 percent in February after jumping by 2.4 percent in January. The dip matched expectations.
The modest decrease in ex-auto sales partly reflected notable declines in sales by department stores, food services and drinking places and furniture and home furnishings stores.
Meanwhile, the report said core retail sales, which exclude automobiles, gasoline, building materials and food services, increased by 0.5 percent in February after surging by 2.3 percent in January.
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