Monday, March 20, 2023

US retail sales decline in February amid high inflation – Usky News

Washington: Retail sales in the United States contracted in February, driven by declines in sales at department and furniture stores as well as restaurants, according to Commerce Department data released Wednesday.
The cooler economic data comes after a big rebound at the start of the year, as persistent inflation weighs on consumers.
The data is likely to provide some respite to the Federal Reserve as it looks to balance its efforts in price growth with the ongoing troubles in the banking sector following the dramatic implosion of Silicon Valley Bank.svb) Last week.
Seasonally adjusted retail sales fell 0.4 percent to $698 billion in February, from a revised $701 billion a month earlier, the Commerce Department said in a statement.
The data showed consumers cutting back on purchases at auto dealers, department stores as well as restaurants and bars.
Shopping at departmental stores declined by four per cent, while shopping at furniture and home furnishing stores declined by 2.5 per cent.
“Retail sales took a step back in February, but not enough to signal a major decline in consumers’ willingness to spend,” said Oren Klachkin of Oxford Economics.
The latest numbers come after the release of consumer inflation data a day earlier that showed price increases continued to moderate.
However, inflation indicators remain well above irrigatedlong-term target of 2 per cent.
As the Fed prepares to hike interest rates for the ninth time in a row next week, the effects of its aggressive campaign are being felt in markets led by regional banks.
SVB’s collapse last week was driven by its over-exposure to interest rate risks through holding of long-dated bonds.
Most of the bank’s customers were in the high-tech sector, and they moved to withdraw their money after the Fed’s campaign ended an era of cheap lending.
This outflow forced the bank to realize losses on its bonds, which prompted the bank’s customers to worry about their deposits.
US finance authorities took action over the weekend to ensure that depositors of SVB would be able to retrieve their funds, which temporarily halted a selloff of banking shares.


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