Robert Besser
18 Mar 2023, 22:58 GMT+10
WASHINGTON D.C.: According to a report from the US Commerce Department, in February, US retail sales fell moderately, likely the outcome of the sharper rise in January, but the continued momentum indicates that despite higher borrowing costs, the economy still expanded in the first quarter of 2023.
Following data released last week showing solid job growth in February, the report made analysts upgrade this quarter's gross domestic product growth estimates.
In terms of inflation, February experienced the smallest year-on-year increase in nearly two years, due to falling producer prices.
However, after the recent collapse of two US banks, the outlook for the the Federal Reserve's interest rate decision, due soon, has become more uncertain.
"American consumers still appear to be spending at a rate that will make the Fed uncomfortable with the inflation outlook, warranting a further tap on the brakes," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, as quoted by Reuters.
In February, retail sales fell 0.4 percent, compared with a forecast by economists polled by Reuters of an average 0.3 percent fall, with estimates ranging from a 1.0 percent decline to a 0.5 percent increase.
Retail sales are mostly goods and are not adjusted for inflation.
A tight labor market, which is generating higher wage growth, is also propping up spending. In January, there were 1.9 job openings for every unemployed person, and consumers have accumulated high levels of savings during the COVID-19 pandemic.
Since last March, the Federal Reserve Bank has raised its benchmark overnight interest rate by 450 basis points from near-zero to the current 4.50 percent to 4.75 percent.
"Recent bank failures and the spike in financial market stress are complicating policymakers' task of reading the economic tea leaves," noted Oren Klachkin, at Oxford Economics in New York, as reported by Reuters.
An analysis of the Bank of America Securities card data in February also showed that services spending was significantly higher than goods spending, suggesting the rotation of spending back to services helped to undercut retail sales in February.
Get a daily dose of Arizona Herald news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Arizona Herald.
More InformationSEATTLE, Washington: As part of Washington's efforts to stop Big Tech from monopolizing the most lucrative parts of the internet, ...
JEDDAH, Saudi Arabia: As part of Riyadh's efforts to further Saudi Arabia's electrification drive, electric vehicle (EV) maker Lucid announced ...
NEW YORK, New York - Stock prices were punctured Friday bringing to an end the 'flash in the pan' rally ...
WASHINGTON D.C. Due to internal brake fluid leaks that can cause an electrical short and could lead to engine fires, ...
WASHINGTON D.C. As part of its efforts to remove goods made by Uyghur forced labor from the U.S. supply chain, ...
LONDON, UK: In August, global production of primary aluminum hit an all-time high, with production running at an annualized rate ...
SACRAMENTO, California: Intending to raise some US$160 million per year to help prevent gun violence, California Governor Gavin Newsom signed ...
WASHINGTON D.C. Due to internal brake fluid leaks that can cause an electrical short and could lead to engine fires, ...
(Photo credit: Rick Scuteri-USA TODAY Sports) The Houston Astros are putting heat on the Texas Rangers with the regular season ...
(Photo credit: Brad Penner-USA TODAY Sports) Two heavy rain storms in the New York area will force the Mets to ...
(Photo credit: Charles LeClaire-USA TODAY Sports) Sleep? The Miami Marlins don't need no stinking sleep. They overcame nearly an all-nighter ...
(Photo credit: Steven Bisig-USA TODAY Sports) J.P. Crawford hit a grand slam and Ty France and Josh Rojas added solo ...