Retail spending is showing some positive signs through February. The signs, however, depend on how you look at the latest government data.
The signs are positive from a seasonally adjusted view of retail sales gains year-to-year. Those sales are up 4.3% in February with the strongest growth online and at home improvement, furnishings, and drug stores.
The signs are much weaker from an unadjusted view of retail sales, however. Those sales are up just 0.7% from a year ago excluding autos, fuel, and restaurants—with online and other nonstore sales showing the only strong growth.
Revisions are pushing the data in a positive direction, but they also provide reason for caution. January’s topline results were revised upward by more than a percentage point for both the adjusted and unadjusted results. February’s results also could face revision—up or down.
If the positive signs prove correct, they may offer evidence that a post-election surge in consumer spending confidence is translating into stronger spending. See more on confidence here.
Here is more on what the numbers say:
- Weak channels. Both the adjusted and unadjusted data show that retail weakness in February was focused at grocery, mass/discount, clothing, electronics, sporting goods, and other specialty stores.
- Strong channels. Online/nonstore is the only sector that shows clear strength in both the adjusted and unadjusted data.
On a quarterly trend, the gap between adjusted and unadjusted growth is unusually wide compared with recent quarters. This may suggest that revisions and another month of data will narrow the first-quarter gap and temper the positive signs suggested by the data through February.
For 2017, MacroSavvy™ has forecast a gain of 4.0% in retail sales excluding autos, fuel and restaurants, which would be slightly stronger than 2016.
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