Retail Sales Were Down, Even Before the Coronavirus
March 17, 2020
Retail sales fell 0.5% in February, suggesting that consumer spending may have been slowing, even before the coronavirus hit the U.S. full force. The drop follows a substantial increase of 0.6% in January.
February’s drop came from a variety of sources, but auto sales, which fell 0.9%, and gas stations, which were down 2.8%. The latter is due to falling gas prices. Even discounting auto sales, retail sales were down 0.4%.
The numbers show that consumer spending may have been on the decline in the run-up to the large-scale disruption we have seen in recent weeks and could make it harder for retailers to weather the storm. Some economists worry that a prolonged slowdown to consumer spending, which accounts for two-thirds of U.S. economic activity, could push the country into a recession.