- Retail sales rose 0.8% in February, stemming from strength in general merchandise stores and motor vehicle and parts dealers. Within the latter, only sales at new car dealers led the growth – while all other store types declined.
- Sales were up in 5 subsectors.
- Excluding prices, volume sales were inched up 0.2% in February. They are still up 1.7% year-over-year.
The February retail numbers came out slightly stronger than expected but part of the increase reflected higher gas prices that pushed up sales at the pump by 1.9%. Volume sales inched up but by a modest 0.2%. Weather might have been a factor slowing sales in some categories, but downward revisions to earlier months also imply overall consumer spending is still slow. We still see much of the softness in overall economic growth in Q1 as transitory in nature, with a bounce-back expected in Q2 as weather related effects wear off and oil production cuts ease. But household spending is unlikely to be the main driver of growth.