The U.S. experienced a pullback in retail sales in February after that huge spike in January sales fueled by $600 fiscal relief payments. But the retreat in February was far greater than anyone expected. Retail sales fell by 3% over January, according to the Census Bureau. That was after the January numbers had been revised up sharply to show sales growth of 7.6%.
Severe cold weather in parts of the country — particularly Texas — likely hurt sales in February, though online sales fell too. All segments fell except for gas stations, which rose by 3.6% year over year. Spending at bars and restaurants fell by 2.5%, while grocery store sales were flat. Department stores experienced the biggest drop at 8.4%.
Despite occasional month-over-month declines, sales were up in two-thirds of categories on a year-over-year basis since June. According to CoStar data, since March 2020, approximately 13,098 stores have announced plans to close, many of them clothing and accessories shops.
February's setback is probably temporary, with the strongest economic growth since 1984 projected this year, helped by the massive fiscal stimulus signed last week into law. The stimulus sends additional $1,400 checks to households as well as extends a government-funded $300 weekly unemployment supplement. It comes as the vaccination process accelerates, which should allow for broader economic growth, even as new COVID-19 cases are starting to creep up.