The U.S. Department of Commerce reported that Advance Estimates of U.S. Retail and Food Services sales for February increased 1.1% over the prior month to a seasonally adjusted $421.4 billion, while sales increased 4.6% compared to the year-ago period. Year-over-year, this was the 40th straight monthly gain.
Total sales excluding Autos were up 3.9% compared to last February and rose 1.0% from the prior month, while total sales less Autos and Gas Stations showed a 4.0% year-on-year increase and were up 0.4% from January.
8 of 13 sectors posted growth over the prior month, led by strong sales at Gas Stations (+5.0% MoM / +3.6% YoY), Auto & Parts Dealers (+1.1% MoM / +7.8% YoY) and Building Materials Stores (+1.1% MoM / +4.5% YoY). However, weakness in more discretionary categories, especially at Restaurants (-0.7% MoM / +4.0% YoY), show consumers are being cautious with their spending.
Walmart's CFO said yesterday that volume is running about a third lower than normal due to delayed tax refunds. This echoes comments from numerous retail executives regarding the negative effects higher taxes and gas prices have had on discretionary spending.
As tax refunds start to trickle in, and with some relief with lower prices at the pump over the past few weeks, we should see a return to more normal spending levels as we head into peak spring selling season.