The weakness in February was fairly broad-based; the outliers were vehicles, spending at gas stations, health and personal care stores and online. The bump in gasoline purchases was aided by a rise in the price of gasoline. Sales at health and personal care stores were boosted by a wicked cold and flu season, while the polar vortex kept people inside and spending online.
Core retail sales, which strip out the volatile vehicle and parts, gasoline, and building materials store sales, fell 0.6% in February. Again, we saw upward revisions to the previous two months.
Bottom LineConsumers are still struggling to emerge from the hibernation that they entered in December. Real GDP appears to be expanding at a 1.3% pace in the first quarter. We expect to see a rebound in the second quarter but underlying momentum has slowed since 2018.
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