Global Economy Briefs

Feb Retail Sales slip following Jan surge

March 15, 2023

Retail sales slipped in February following a spike in January. Total sales fell by 0.4 percent month-over-month, but were up 5.4 percent from a year earlier in nominal terms. However, after adjusting for inflation, retail sales growth fell 0.8 percent month-over-month. Unseasonably warm weather probably helped drive spending activity in January, but it appears that tailwind has waned and consumers are once again reigning in their spending. We expect this trend to continue over the coming months as the US economy slips into a recession.

Consumer demand for goods stalled in January — falling by 0.1 percent from the previous month in nominal terms. Spending on motor vehicles and parts fell by 1.8 percent in February from January, while retail sales excluding motor vehicles and parts rose by 0.3 percent. Spending at gasoline stations fell 0.6 percent from the month prior. Retail sales less motor vehicles, gasoline, and building supplies (known as “Retail Control”) rose by 0.5 percent from the previous month. Sales at department stores fell by 4 percent following an 18 percent spike in January. When adjusting goods spending for CPI inflation, the real growth rate was about -0.3 percent from the previous month.*

Meanwhile, spending at food services and drinking places fell 2.2 percent month-over-month, vs. up 5.6 percent in January. However, after adjusting for CPI inflation the real growth rate was about -2.3 percent from the previous month.*

* Real growth rates are The Conference Board estimates based on Census Retail Sales data and BLS CPI data