A shopper walks past a mostly bare shelf as people stock up on essentials at the HEB grocery store in Austin, Texas on February 18. A devastating winter storm that hit the center of the country last month contributed to retail sales falling. Joe Raedle / Getty Images hide subtitles
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Joe Raedle / Getty Images
A shopper walks past a mostly bare shelf as people stock up on essentials at the HEB grocery store in Austin, Texas on February 18. A devastating winter storm that hit the center of the country last month contributed to retail sales falling.
Joe Raedle / Getty Images
Consumers put their paperbacks on hold last month after a January shopping spree.
Retail sales fell 3% in February. according to the commercial department. That’s the sharpest drop since the first few months of the pandemic, and a much steeper drop than economists expected.
A winter storm that covered much of the central part of the country last month was partly to blame and depressed demand for sporting goods, home improvement and general goods. Online sales, which tend to be more weather-resistant, also fell 5.4%.
“Let’s not crush words. That was bad,” wrote Wells Fargo economists Tim Quinlan and Shannon Seery all rolled into one Research note.
The storm also cooled industrial production in February. Production output fell by 3.1%.
However, forecasters assume that sales will recover in the coming months.
The fall in retail sales in February follows a buying spurt in the previous month when revised numbers show sales rose 7.6%. That was partly fueled by $ 600 aid payments that arrived early in the new year.
With another round of $ 1,400 worth of bailouts now hitting consumer bank accounts, forecasters expect more free spending this spring.
The extra money arrives as states gradually relax COVID-19 restrictions and increased vaccinations make it easier for consumers to spend.
“With healthier and warmer days approaching and generous stimulus controls on the way, consumers are ready to shake off the winter chill,” said Lydia Boussour of Oxford Economics. “This year we expect the combination of improved health and generous fiscal incentives to: a Consumer boom for the history books. “
