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U.S. retail sales decline for third straight month in February

Reuters  |  WASHINGTON, March 14 

WASHINGTON, March 14 (Reuters) - U.S. 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 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 sales have declined for three straight month.

Economists polled by had forecast sales rising 0.3 percent in February. sales in February increased 4.0 percent from a year ago.

Excluding automobiles, gasoline, building materials and food services, sales edged up 0.1 percent last month after being unchanged in January. These so-called core sales correspond most closely with the consumer spending component of

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 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. growth estimates for the January-March quarter are around a 2 percent annualized rate.

The 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 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 surged 1.0 percent. Sales at restaurants and bars rose 0.2 percent. Receipts at sporting goods and hobby stores jumped 2.2 percent.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 14 2018. 18:14 IST