US retail sales down 0.2% in February in mixed economic data
Retail sales declined, but manufacturing increased in the latest data report.
US retail sales fell in February by 0.2%, below the 0.3% rise expected from economists. However, the manufacturing index improved to 55.8%, according to statistics from the US Commerce Department.
Why did US retail sales fall in February?
US retail sales declined after weak sales in January. The decline in sales is likely because of the effects of the US government shutdown. Because of the shutdown affecting the Internal Revenue Service (IRS), taxpayer refunds were issued later than usual. As a result, Americans cut back on purchases of cars, clothes, and even food. National Retail Federation ( NRF) Economist, Jack Kleinhenz, also noted that the harsh winter and Wall Street volatility also affected US retail sales in February.
‘The weaker-than-expected February retail sales numbers reflect colder weather and increased precipitation that kept shoppers home but were also skewed downward because of the government's upward revision in January's results,’ said Kleinhenz.
‘The after-effects of the erratic stock market, the government shutdown, and slower tax refunds this year also likely played a role. It is important to look beyond the February figures and focus on the very significant revision to January retail sales, which shows that the consumer has not forsaken the economy as some previously claimed,’ added Kleinhenz.
Manufacturing index improves in February
While retail news was disappointing, there was slightly better news for US manufacturing. The US manufacturing index rose one point to 55.8% as new orders grew in February. Economist, Richard Moody, said the manufacturing data shows that the US economy may not be completely slowing down yet.
‘There is nothing in the details of the data or the comments to make you think the expansion is going to come to an end anytime soon,’ said Moody.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Be ready to act on ECB opportunities
Learn how the ECB’s monetary policy announcements affect interest rates and price stability ahead of its next meeting in 30 January 2025.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.