WASHINGTON, March 17 — The coronavirus took a bite out of US retail sales in February, government data released Tuesday showed, with almost all sectors falling and fuel sales leading the decline.
The data are the latest in the growing body of evidence of the virus’ economic toll, but the survey was taken before the outbreak spread across the United States and put entire counties on lockdown, which has led many economists to conclude the US is likely heading into recession.
Retail sales in February declined 0.5 per cent to US$528.1 billion, seasonally adjusted, a worse-than-expected result and a sharp decline that erased most of the gain seen in January.
While sales were still a 4.3 per cent above February 2019, Gregory Daco of Oxford Economics said that number was distorted because spending pulled back in early 2019 due to the extended federal government shut down.
“Disruptions from the coronavirus will bring the economy’s main engine to a halt,” he wrote in an analysis. “As the virus keeps consumers at home and panic spreads, discretionary spending and ‘social consumption’ will take a significant hit.”
Gas stations led the fall in sales with a 2.8 per cent drop compared to January as oil prices began declining at the end of February, amid reduced global demand due to the coronavirus outbreak in China, which has now spread worldwide.
US sales of building materials and electronics also saw declines of about 1.5 per cent.
Food and beverage sales were flat, perhaps thanks to stockpiling and panic buying as the virus loomed in the public conscience, while sporting goods, music and book stores registered a slight increase.
Nonstore retailers, such as e-commerce websites, posted a gain of 0.7 per cent.
Data will almost certainly get worse before it gets better, Rubeela Farooqi of High Frequency Economics said.
“The data indicate net slowing in total real spending,” she wrote in a note, adding she expects total consumer spending to register a decline of 1.5 per cent in the second quarter. — AFP