Americans sat on their wallets in February as new data reveal retail sales slumped on the effects of the Trump government shutdown and bad weather. The weaker-than-expected February retail sales numbers were also pushed lower due to an erratic stock market and slower tax refunds.
The National Retail Federation (NRF) says sales were down 0.7% in February seasonally adjusted from January but up 2.7 percent unadjusted year-over-year as delays and revisions related to the government shutdown continued to make comparisons difficult.
March looks a bit better as consumer confidence rebounded in March to 98.4 from last month’s 93.8, slightly above the average of 97.2 recorded in the past 26 months. The March gain in the Sentiment Index was entirely due to households with incomes in the bottom two-thirds of the income distribution.
Rising incomes were accompanied by lower expected year-ahead inflation rates, resulting in more favorable real income expectations, posting a gain of +7.1 Index-points, while households with incomes in the top third fell by 1.1 Index-points.
According to the University of Michigan Surveys of Consumers found rising incomes were accompanied by lower expected year-ahead inflation rates, resulting in more favorable real income expectations, posting a gain of +7.1 Index-points, while households with incomes in the top third fell by 1.1 Index-points.
The NRF is forecasting retail sales during 2019 will increase between 3.8% and 4.4% to more than $3.8 trillion. The consumer will continue to provide direction and strength to the U.S. economy in the months ahead
The University of Michigan Surveys of Consumers notes no further decline in interest rate expectations were recorded in March, suggesting consumers anticipated additional increases in 2019. Overall, the data do not indicate an emerging recession but point toward slightly lower unit sales of vehicles and homes during the year ahead.
Meanwhile, the Conference Board Consumer Confidence Index declined in March to 124.1, compared 131.4 in February. The Present Situation Index (consumers’ assessment of current business and labor market conditions) declined, from 172.8 to 160.6. The Expectations Index (based on consumers’ short-term outlook for income, business and labor market conditions) – decreased from 103.8 last month to 99.8 this month.