US Retail Sales Slide for 3rd Month Running, Inflation Edges Up
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US retail sales fell for a 3rd straight month in February as households cut back on purchases of motor vehicles and other big-ticket items.
Despite signs of cooling in consumer spending, inflation pressures are building, which may allow the Fed to raise interest rates next week.
Other data Wednesday showed underlying producer prices rose solidly in February, driven by strong gains in the cost of services such as hotel accommodation, airline fares and hospital inpatient care.
The sustained decline in retail sales is surprising as consumer confidence is at a more than 17-year high in the wake of a $15-T income tax cut package and a labor market that continues bring in jobs.
The Commerce Department said retail sales slipped 0.1% last month. January data was revised to show sales dipping 0.1% instead of falling 0.3% as previously reported. It was the 1st time since April 2012 that retail sales have declined for 3 straight months.
Economists polled by Reuters had forecast retail sales rising 0.3% in February. Retail sales in February increased 4.0% from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales edged up 0.1% last month after being unchanged in January. These core retail sales correspond most closely with the consumer spending component of GDP (gross domestic product).
As a result of the weak core retail sales at the start of the year, economists lowered their Q-1 GDP growth estimates.
Wednesday, the major US stock market indexes finished at: DJIA -248.91 at 24758.12, NAS Comp -14.20 at 7496.80, S&P 500 -15.83 at 2749.48
Volume: Trade on the NYSE came in at: 829-M/shares exchanged
- NAS Comp +8.6% YTD
- S&P 500 +2.8% YTD
- DJIA +0.2% YTD
- Russell 2000: +3.2% YTD
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