US Retail Sales Fell 0.1% In February
Monday, March 19, 2018
Posted by: Alyce Ryan
AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Manufacturing Economic Daily Newsletter” from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).
Bloomberg News (3/14, Dmitrieva) reports that the Commerce Department announced on Wednesday that “US retail sales unexpectedly fell in February for a third month, adding to signs that consumer spending – the biggest part of the economy – is easing after strong gains in the fourth quarter.” The February figure “missed the median economist forecast for a 0.3 percent gain.” Reuters (3/14, Mutikani) reports that “households cut back on purchases of motor vehicles and other big-ticket items, prompting analysts to downgrade their first-quarter economic growth forecasts.” According to Reuters, “despite signs of cooling in consumer spending, inflation pressures are steadily building, which should allow the Federal Reserve to raise interest rates next week,” and the article adds that “the sustained decline in retail sales is surprising as consumer confidence is at a more than 17-year high in the wake of a $15 trillion income tax cut package and a labor market that continues to churn out jobs.” Morgan Stanley Chief Economist Ellen Zentner downplayed the significance of the data, saying, “Looking at consumer fundamentals there appears to be nothing sinister going on among America’s households. We posit that the anticipation of the widely publicized tax cuts pulled forward spending into the fourth quarter of 2017.” The AP (3/14, Boak) reports that the slight decline in sales comes “despite signs elsewhere of a robust economy and the tax cuts signed into law by President Donald Trump starting to take effect.” The AP writes that “many economists expect to see gathering momentum for consumer spending given that the unemployment rate is at a low 4.1 percent and the benefits from the tax cuts start to filter through the broader economy.” It quotes PNC Financial Services Chief Economist Gus Faucher saying, “This lull is temporary.”
Commerce Department: US Business Inventories Rose “Solidly” In January. Reuters (3/14, Mutikani) reports that the Commerce Department announced on Wednesday that US business inventories “increased solidly in January,” adding that inventories “rose 0.6 percent after advancing by the same margin in December.” The gain “was in line with economists’ expectations,” and that “manufacturing inventories climbed 0.3 percent in January and stocks at wholesalers surged 0.8 percent.”
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