At first glance, the 3% monthly decline in retail sales for February would seem to be a cause for concern. But a look beyond the top-line number reported by the Commerce Department on Tuesday paints a more nuanced picture, one that suggests pent-up consumer demand and the prospect of stronger sales in the future.
One reason for the monthly decline was the impact of the severe winter weather that gripped much of nation and brought commerce to a halt in many areas. But that’s not the whole story, and there are other numbers to look at when considering where retail is headed.
- Year-ago comparisons: First, the year-over-year comparisons for January and February were 7.8% and 2.4%, respectively. These two months will be the last before the data is compared by month, starting in March, when lockdowns where put in place with the onset of the pandemic.
- Upward revisions: January’s month-over-month revised figure jumped from 5.3% to 7.6%—far higher than economists’ original expectations of 1.1%. This puts into perspective how significant the January numbers are.
- The three-month figures: The last numbers to look at are the three-month annualized data for January and February, which increased by 21% and 12.6%, respectively. As anticipated, the January number was adjusted upward from its previous 12%.
While the monthly figure for February was down compared to January, we anticipate that with more of the population getting vaccinated, the reduction of economic restrictions and the additional stimulus money being sent to Americans, we will see strong demand through the spring and into the rest of the year.
For more information on how the coronavirus pandemic is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
