Retail Sales Show Respectable Growth In February, But Dragged Down By January Revision

Consumer spending did not get off to a good start after all in 2016 as big downward revisions to January retail sales badly upstage respectable strength in February. January retail sales are now at minus 0.4 percent vs an initial gain of 0.2 percent. The two major sub-readings also show major downward revisions with ex-auto sales now down 0.4 percent vs an initial gain of 0.1 percent and ex-auto ex-gas sales now at minus 0.1 percent from plus 0.4 percent. The latest for this latter core rate is really the only main positive in today's report, up a solid 0.3 percent in February. Total sales for February are weak at minus 0.1 percent as is the ex-auto reading, also at minus 0.1 percent. Even in the core readings, details for are not great with strength so far this year mixed across nearly all categories. January and February are the lowest sales months of the year, a fact that magnifies adjustment effects and can cause volatility in the readings. But that aside, consumer spending, despite high employment, appears to be extending the flatness of the holiday season.

Recent History Of This Indicator:
Weakness for auto sales and also for gasoline sales are expected to hold down retail sales which are otherwise expected to show solid strength, at plus 0.3 percent for February's ex-auto ex-gas core reading. This core rate has been holding up well and pointing to a continued solid contribution from consumer spending. Total sales are expected to fall 0.1 percent with ex-auto sales down 0.2 percent.