Barclays Cuts US GDP Forecast to 1.9% After Retail Sales Drop

Retail sales excluding automobiles, gasoline, building materials and food services were unchanged after a downwardly revised 0.2 percent increase in January. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product and were previously reported to have risen 0.6 percent in January.

Last month’s weak reading, together with January’s modest gain, suggest that consumer spending will probably remain tepid in the first quarter after growing at a 2.0 percent annualized rate in the fourth quarter.

The report came as Federal Reserve officials prepared to gather for a two-day policy meeting. The U.S. central bank is expected to leave interest rates unchanged as policymakers monitor developments on global financial markets, domestic inflation and the labor market.

The Fed hiked its benchmark overnight interest rate in December for the first time in nearly a decade.

A 4.4 percent drop in the value of sales at service stations weighed on retail sales last month. Gasoline prices dropped 9 percent in February, according to the U.S. Energy Information Administration, as oil prices fell further.

Retail sales were also hurt by a 0.2 percent fall in sales at auto dealerships. Auto sales declined 0.2 percent in January.

Clothing store sales rose 0.9 percent last month. Receipts at building materials and garden equipment stores gained 1.6 percent, while sales at furniture stores fell 0.5 percent.

via CNBC

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza