(Reuters) – U.S. retail sales rebounded in February, suggesting that the economy continued to grow in the first quarter, though at a moderate pace as tariffs on imports and mass firings of federal government workers weigh on sentiment.
Retail sales rose 0.2% last month after a revised 1.2% decline in January, the Commerce Department said on Monday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, advancing 0.6% after a previously reported 0.9% drop in January.
That decline followed hefty gains in the fourth quarter and winter storms in many parts of the country in January as well as wildfires in California.
MARKET REACTION:
STOCKS: U.S. stock index futures pared losses and were off 0.02%, pointing to a little changed open on Wall Street
BONDS: The 10-year U.S. Treasury yield rose to 4.308% from around 4.291% before the number, while the two-year yield rose to 4.05% from 4.025% before the reportFOREX: The dollar index was off 0.18%, little changed, and the euro was up 0.16%
COMMENTS:
ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK
“Investors are looking for any type of positive bullish catalyst in this environment when uncertainty is so elevated. Any news or data that is not the-end-of-the-world kind of data is being received well.
When you look at retail stocks, a lot of them are beaten down hard. This whole selloff began when Walmart reported earnings and then gapped down… lots of other retail stocks have been getting crushed… The consumer makes up two-thirds of the economy or thereabouts, so any news that retail sales or the consumer is not about to fall off of a cliff is considered good news especially in this environment since we’re so oversold.”
BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN
“The only signs of a bounce-back in spending from January’s weather-induced slump, and stocking up ahead of tariffs, was in online spending. Sentiment is often a horrible predictor of spending, but the good vibes that have propped up spending are now a distant memory.”
PHIL BLANCATO, CHIEF EXECUTIVE OFFICER OF LADENBURG THALMANN ASSET MANAGEMENT IN NEW YORK”I’m impressed with this number, but let’s not forget March tends to be a pretty good month for spending.”On recession worries he added “it’s just too early to tell. There are still too many unknowns and it’s hard to make that rationale. We have an expensive stock market and we’re probably looking at a difficult year to start.”
(Compiled by the Global Finance & Markets Breaking News team)
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