Italy Retail Sales Fall For Second Month

Italy Retail Sales Fall For Second Month

Italy Retail Sales Fall For Second Month

USA consumers spent less at auto dealers, gas stations and department stores in February, causing overall retail sales to slip 0.1 per cent despite signs elsewhere of a robust economy and the tax cuts signed into law by President Donald Trump starting to take effect. For the year, retail sales without cars were up 4.4 percent (and vehicle sales were up 2.3 percent). The core retail sales that economists monitor - which exclude autos, building materials, gasoline and restaurants - improved a mere 0.1 per cent in February after essentially being flat in January.

Excluding cars, gasoline, construction materials and food, the retail sales rose by 0.1% in February after falling unchanged in January. These so-called core retail sales correspond most closely with the consumer spending component of GDP.

Consumer spending, which accounts for more than two-thirds of USA economic activity, appears to have slowed at the start of the year after accelerating at a 3.8 percent annualized rate in the fourth quarter.

Consumer spending remains underpinned by a strong labour market, which is viewed by Fed officials as being near or a little beyond full employment. In February, the USA economy has created 313,000 new jobs.

She said this also raises a question for the Federal Reserve: If inflation is not rising, but how the forces of tax cuts, spending increases and now tariffs will lift inflation, how quickly the Fed should raise interest rates in response? Slower consumer spending supports expectations of modest economic growth in the first quarter. Receipts at petrol stations declined 1.2%, reflecting lower fuel prices.

In addition to declines at auto dealers and gas stations, February's figures reflected lower demand at furniture and home furnishing stores, electronics and appliance vendors, food and beverage sellers and health and personal care stores.

In a separate report, the Labour Department said a key measure of underlying producer price pressures that excludes food, energy and trade services rose 0.4% in February, matching January's gain.

"However, the biggest risk facing consumers is higher inflation, which has the potential to erode purchasing power and keep consumers on the sidelines", Wells Fargo said, but it noted the new numbers prices appear to be in check.

But there were some pockets of strength.

Non-store sales, including online pureplays, reached $55.1 billion, which is a 1 percent increase over January and 10.1% gain when compared the prior year period. Gas sales were down 1.2 percent for the month, but up 7.9 percent for the year, since gas prices are generally higher now than a year ago.

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