US retail sales volumes undershoot forecasts in February

US retail sales undershot forecasts last month and although economists said that they would likely be revised higher, they were also quick to warn that sharp drops in consumer spending lay ahead.

According to the Department of Commerce, in seasonally adjusted terms, sales volumes shrank at a 0.5% month-on-month pace in February to reach an annualised pace of $528.11bn

The median consensus forecast was for a rise of 0.2%.

However, Commerce's estimate for the previous month was revised higher, from an initially reported increase of 0.3% to 0.6%.

Commenting on Tuesday's data, Ian Shepherdson at Pantheon Macroeconomics said: "These data pre-date the hit from the coronavirus, and March sales, ex-food and household supplies, are likely to plunge, given lockdowns around the country.

"Remember too that these data mostly capture spending on goods, but the biggest hit will be in spending on discretionary services.

"Restaurants are included in the retail sales numbers, but a large swathe of spending on leisure-time activities is not counted here, and it is collapsing right now."