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US Retail Sales Decline Unexpectedly in February

US retail sales declined sharply in February, as record cold in parts of the country put a grip on consumer spending at the beginning of the year.

Retail receipts tumbled 0.6 percent in February, following a 0.8 percent drop in January, the Commerce Department reported on Wednesday. A median estimate of economists called for a 0.3 percent gain.

Compared to February 2014, retail sales were up 1.7 percent.

January marked the third consecutive decline in retail sales, as record low temperatures in parts of the United States contributed to slumping demand in most retail segments, especially the automotive sector and building-material stores. Sluggish wage growth was likely also a factor, a sign consumers were using their gas savings to pay down debt rather than boost spending on other goods and services.

Excluding automobiles, retail sales fell 0.1 percent in February, following a 1.1 percent decline the previous month. Core sales, which strip away volatile categories such as food, energy and automobiles and correspond more closely with the consumer spending component of GDP, were unchanged after a 0.1 percent decrease in January.

In total, nine of 13 retail categories posted declines in February, led by a 2.5 percent drop at motor vehicle and parts dealers, as well as a 2.3 percent decline at building material and garden equipment stores. Electronics and appliance store stores fell 1.2 percent, while general merchandise stores posted a 1.2 percent drop.

The industries to report growth in February included sporting goods stores and non-store retailers, which posted gains of 2.3 percent and 2.2 percent, respectively.

Household consumption, which accounts for more than two-thirds of the US economy, is expected to expand this quarter after growing at an annualized rate of 4.2 percent in the final three months of 2014. That was the biggest gain since the fourth quarter of 2010, according to revised figures posted in February.

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