US retail sales have dropped for a third consecutive month, new figures show.
Retail sales declined by 0.6 per cent on the month in February, with economists split on the impact it will have on interest rates.
“A 0.6 per cent deterioration in sales in February was possibly due to severe weather affecting many parts of the country in the second half of the month, but this was not a one-off fall. Sales have now fallen in each of the past three months, which rings alarm bells about the health of the US economy,” said economist Chris Williamson from Markit. Williamson believes the data will put the Federal Reserve off raising interest rates any time soon. Other economists are still betting on a June rate hike.
“There is no denying that the lack of evidence of a pick-up in consumption growth is disappointing given the boost to purchasing power from lower energy prices,” said economist Paul Ashworth from Capital Economics. “But even though we haven't seen it feeding through yet, we do still expect to see that acceleration soon. The biggest driver of real consumption growth is real incomes, and those incomes have been rising at a dramatic pace recently.”