Retail Sales Plunge Amid February Freeze

U.S. retail sales plunged by more than expected in February amid bitterly cold weather.

Retail sales declined by 3 percent in February compared with the prior month, the Commerce Department said Tuesday. Economists had expected a much smaller decline of 0.5 percent.

January’s sales, however, were revised up to show a stronger gain. Initially reported as a 5.3 percnt gain compared with December, January’s retail sales now show a 7.6 percent gain.

Retail sales were up 6 percent over the last three months compared with the same period a year ago, according to the Commerce Department.

Excluding vehicles and gas stations, retail sales dropped 3.3 percent in February. They gained an upwardly revised 8.9 percent in January.

The figures appear to reflect stimulus-induced volatility. Many U.S. households received $600 relief payments from the federal government in January.

February is typically a slow month for retail sales. The harsh weather in much of the country, including the freeze that practically shut down Texas midmonth, likely contributed to the slump.

The declines in sales were widespread. Nonetheless, sales at grocery stores advanced one-tenth of a percentage point.

On a year over year basis, sales in most categories were up. Car dealership sales are up 9.5 percent compared with a year ago. Sales at restaurants and bars, clothing stores, department stores, and electronic and appliance stores are down from 2020.

Online sales are up 25.9 percent compared with last year but fell 5.4 percent in February compared with January.