U.S. retail sales fell for a third straight month in February as households cut back on purchases of motor vehicles and other big-ticket items, pointing to a slowdown in economic growth in the first quarter.
The Commerce Department said on Wednesday that retail sales slipped 0.1 percent last month. January data was revised to show sales dipping 0.1 percent instead of falling 0.3 percent as previously reported. It was the first time since April 2012 that retail sales have declined for three straight month.
Economists polled by Reuters had forecast retail sales rising 0.3 percent in February. Retail sales in February increased 4.0 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales edged up 0.1 percent last month after being unchanged in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Consumer spending, which accounts for more than two-thirds of U.S. 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.
But spending remains underpinned by a strong labor market, which is viewed by Federal Reserve officials as being near or a little beyond full employment. The economy created 313,000 jobs in February.
Consumer spending could also get a lift from a $1.5 trillion income tax cut package. Slower consumer spending supports expectations of modest economic growth in the first quarter. Gross domestic product growth estimates for the January-March quarter are around a 2 percent annualized rate.
The economy grew at a 2.5 percent pace in the fourth quarter. But revisions to December data on construction spending, factory orders and wholesale inventories have suggested the fourth-quarter growth estimate could be raised to a 3.0 percent pace. The government will publish its third estimate for fourth-quarter GDP growth later this month.
In February, auto sales fell 0.9 percent after a similar drop in January. Receipts at service stations declined 1.2 percent, reflecting lower gasoline prices. There were also declines in sales at furniture stores, health and personal care stores and electronics and appliance stores.
But there were some pockets of strength in the report. Sales at building material stores increased 1.9 percent last month.
Receipts at clothing stores gained 0.4 percent and sales at online retailers surged 1.0 percent. Sales at restaurants and bars rose 0.2 percent. Receipts at sporting goods and hobby stores jumped 2.2 percent.