Published: Sat, March 17, 2018
Money | By Armando Alvarado

Things Consumers Are Buying More of Despite Slowing Retail Sales

Things Consumers Are Buying More of Despite Slowing Retail Sales

"Consumers are still in the driver's seat", NRF Chief Economist Jack Kleinhenz said. This is a signal of a slowdown in economic growth in the first quarter. "Month-to-month comparisons don't tell the whole story because of seasonal adjustment factors, but the three-month moving average and other year-over-year numbers are better indicators that reflect how sales are really increasing".

USA wholesale prices rose 0.2 percent in February, a sign that inflation is beginning to grow for producers even if consumers have yet to feel its pinch.

The drop was unexpected in part because many Americans' tax withholdings dropped in early February due to a $1.5 trillion tax break signed into law late past year.

The trade organization reaffirmed its outlook, which pegs annual retail sales growth for 2018 at 3.8% to 4.4%.

"We firmly believe that core consumer price inflation is rising and the March CPI report will be the acid test of that hypothesis", said John Ryding, chief economist at RDQ Economics in NY. Many economists expect the USA central bank will raise its projection to four rate increases because of a robust labor market and firming inflation.

General merchandise stores were up 2.4 percent year-over-year but down 0.4 percent from January seasonally adjusted.

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Ховежер, the cost remains supported by the strong labor market, which, according to the Federal Reserve, is close to full employment.

The Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, has undershot its target since May 2012. Consumers have continued migrating to online outlets such as Amazon and away from traditional department stores, dampening overall sales as the competition to charge the lowest price has increased.

The report seems to contradict some of the optimism among retailers, which added 50,300 jobs in February. Auto sales fell 0.9% in February after a similar drop in January. At the same time, however, the sales of building materials increased by 1.9% last month.

Last month's drop in sales largely reflected reduced spending on cars and gasoline.

Consumers also spent more at restaurants and bars and on sporting goods and hobbies.

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