Retail sales in February demonstrated a solid performance, growing by 0.2%, despite the economic uncertainties looming over the market. This growth came after the downward revision of the January retail sales report, which originally indicated a 0.9% decline. Despite the revision, underlying readings from the latest report suggest that the market remained resilient, even as concerns about an economic slowdown and inflation persisted.
The control group, an essential measure that excludes non-core sectors and contributes directly to gross domestic product (GDP) calculations, saw a 1% increase in February. This growth reflects the robustness of sales beyond the headline figures, providing some optimism against the backdrop of rising inflation. Prices rose by 0.2% in February, while the year-over-year sales increase reached 3.1%. In contrast, the inflation rate, as measured by the consumer price index, was recorded at 2.8%.
One of the bright spots in the retail landscape was the performance of nonstore retailers, who reported a substantial 2.4% increase in sales. This surge was largely driven by online spending, which played a crucial role in bolstering the overall sales number for the month.
However, not all indicators painted an optimistic picture. The Empire State Manufacturing Survey for March posted a reading of -20, highlighting a significant difference between companies experiencing expansion versus those encountering contraction. This negative reading signals potential challenges within the manufacturing sector.
Furthermore, the Atlanta Federal Reserve's GDPNow tracker suggested that economic growth might turn negative in the first quarter. This projection underscores the ongoing concerns about economic stability amid fluctuating retail sales and inflationary pressures.