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Economic News

US Retail Sales Post Tepid Growth in February

March 14, 2024
Francis Généreux
Principal Economist


  • Retail sales rose 0.6% in February after falling 1.1% in January (revised from -0.8%). Excluding cars and gasoline, sales were up 0.3%.


Although retail sales fell more than previously published in January, they didn't take long to recover. As predicted, warmer February weather encouraged consumers to start spending again. That said, sales were still down from last fall.

As expected since the data on new motor vehicle sales was released early this month, the rebound was partly driven by car dealerships, where sales jumped 1.6%. That's the most they've grown since May 2023. Higher gasoline prices also played their part, with gas station receipts up 0.9% month−on−month.

The 0.3% uptick in sales excluding motor vehicles and gasoline was less impressive, but is nevertheless promising after a 0.8% plunge in January, the worst decline since March 2023. The biggest gains came from sales at building materials stores (+2.2%), which had also plummeted in January (-4.3%).  Food services also rebounded after dropping in January. Electrical equipment was up once again after rising in January.

But some weak spots remain. For the first time since 2013, nonstore retailers have slid for two months in a row. Clothing store sales retreated 0.5% (after losing 0.8% in January), even though CPI data showed prices rising 0.6% in this sector. Meanwhile, furniture stores lost 1.1% month−on−month (-10.1% year−on−year). This was probably due to high interest rates and a decrease in term loan approvals in the United States.

After rising rapidly in the last half of 2023, consumer spending will probably post more tepid growth for the first quarter of 2024. Retail sales for January and February suggest there may not have been any real increase in goods consumption. A sudden resurgence in March would help matters, but we nevertheless feel that US consumers are losing momentum. High interest rates, a downturn in consumer credit and reduced accumulated savings are all factors that could slow consumption in the first half of 2024.


After a disappointing January, the February rebound in retail sales was a welcome change. These shifts seem to have been influenced by the weather. That said, sales are still down from late 2023, and consumers seem to be easing up on spending. Weak monthly growth in retail sales over the next few months could help further cool inflation, which may lead the Federal Reserve to start cutting rates in late spring. 

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.