The Census Bureau announced on Wednesday that retail sales grew 0.3 percent in February, slightly below estimates.This is a slowdown from the blistering pace of January and a drop from December. Many shoppers pre-purchased holiday gifts ahead of the Christmas shopping season, and many are now returning to more typical buying patterns.
After January’s revised 4.9 percent growth, analysts predicted a 0.4 percent increase. The month saw a 5.3 percent increase in gasoline sales, as prices surged to near $4 per gallon. In the absence of fuel sales, retail sales fell by 0.2 percent for the month.
As the impacts of the government’s reaction to the coronavirus pandemic fade and runaway inflation bites into the wallets of regular Americans, economists foresee a slowdown in consumer spending.
According to Jonathan Silver, CEO of Affinity Solutions, which records credit and debit card usage for retailers, “signs of increased spending are an indication that the pandemic may be winding down.” “Our data suggests that people are getting back out and about, with food and drinking establishments up 64 percent year over year and general retail up 57 percent.”
“Our data shows that expenditure is growing year over year in every area,” Silver adds. “This is a clear evidence that the pandemic is subsiding, and while other difficulties such as inflation persist, people are eager to spend.”
Nonetheless, he observes that lower-income families’ spending has decreased, while higher-income families continue to purchase. According to the Census report, food and beverage spending grew 2.5 percent in February, while clothes spending increased 1.1 percent.