Consumers seem to be pocketing their savings from lower gas prices, as U.S. retail sales fell 0.1% in February, to a seasonally adjusted $447.31 billion, the U.S. Census Bureau said Tuesday. Moreover, January month-to-month figures were downwardly revised to a 0.4% drop in sales, versus the initially reported 0.2% increase.
Much of the decline in overall sales was due to lower gas prices. Excluding both gas and motor vehicle sales, overall retail sales rose 0.3%. Spending increased in a number of categories, including building materials and garden equipment; sporting goods, books and music; health and personal care items; clothing; and restaurants and bars.
Year-over-year, overall sales were 4.8% higher, but consumers apparently aren’t spending as much of their savings from lower gas prices as they could, according to The Wall Street Journal.
In a separate report from the Commerce Department, business inventories edged up 0.1%. That pushed the inventory-to-sales ratio to its highest point since May 2009.
Tuesday’s numbers increase the chances that Federal Reserve policymakers will hold off raising a key interest rate for a second time when they meet this week, according to an Associated Press story posted by ABC News.
“Today’s [retail sales] report is decidedly negative for both the economy and the probability of a near-term rate hike from the Fed,” BNP Paribas economist Bricklin Dwyer told the AP.