US retail sales gained considerable year-over-year traction in February – despite a monthly slowdown from unusually high numbers in January – as increased Covid-19 vaccination, government stimulus and reduced restrictions on businesses continued to impact the pace of spending, the National Retail Federation said.
NRF Chief Economist Jack Kleinhenz added, “February’s results confirm that consumers are willing to spend as the virus situation improves and continued government stimulus further strengthens the economic backdrop. With another round of stimulus checks being mailed right now, we expect another large boost in consumer spending over the next few months.”
The U.S. Census Bureau today said overall retail sales in February were down 3% seasonally adjusted from January but up 6.3% year-over-year. That compares with a monthly increase of 7.6% and a yearly gain of 9.5% in January. Despite occasional month-over-month declines, sales have grown year-over-year every month since June, according to Census data.
NRF’s calculation of retail sales – which excludes automobile dealers, gasoline stations and restaurants to focus on core retail – showed February was down 3.4% seasonally adjusted from January but up 7.1% unadjusted year-over-year. That compared with an increase of 7.7% month-over-month and an increase of 12.7% year-over-year in January. NRF’s numbers were up 8.9% unadjusted year-over-year on a three-month moving average.
“February’s retail sales numbers are a minor speed bump on the road to post-pandemic recovery and are not a reflection of consumers’ willingness and ability to spend and drive the economy,” NRF President and CEO Matthew Shay said. “A number of factors contributed to these results, including major snowstorms in the northeast and unprecedented ice storms in the south, but they do not diminish the stimulus-related growth we saw in January or what we expect to see as additional stimulus relief hits consumer bank accounts in the weeks ahead. Looking forward to the spring and with consumer confidence at its highest level since last March, we remain optimistic that retail will help facilitate a surge in spending, job growth and capital investment in the second half of the year as more Americans are vaccinated and local economies reopen nationwide.”
NRF is forecasting that 2021 retail sales will increase between 6.5% and 8.2% over 2020, for a total between $4.33 trillion and $4.4 trillion. Retail sales during 2020 increased 6.6% despite the pandemic, beating the previous record growth rate of 6.3% in 2004. February retail sales fell in every category except groceries, which were unchanged, on a month-over-month basis. But sales were up in two-thirds of categories on a year-over-year basis, which provides a better indicator of long-term trends and the state of the economy.