Retail sales plunge as consumers hesitate to spend gas savings

Retail sales plunged in February for a third consecutive month as consumers remained hesitant to spend the money they’ve saved from low gasoline prices and bad weather added another obstacle for shoppers.

Sales decreased 0.6% last month, fueled by a major decline in auto purchases, the Commerce Department said.

The decline was an improvement over drops of 0.8% in January and 0.9% in December that were caused by a sharp drop in gas station sales.

As gas prices started to increase, economists expected retail sales to bounce back into positive territory in February. They forecast a 0.3% increase.

Sales at gas stations, which are included in the retail data, were up 1.5% in February, compared with the previous month. However, gasoline sales were down 24% compared with a year earlier.

Consumers still recovering from the Great Recession have not used those savings at the pump to go on shopping sprees. And severe winter weather in the Northeast and Midwest closed stores and kept many people home during parts of last month.

“Consumers may have throttled back spending, but they maintain the ability and means to spend,” said Jack Kleinhenz, chief economist at the National Retail Federation. “With the onset of warmer, spring-like temperatures and an earlier Easter, consumers will likely shake off the winter chills.”

Sales at auto dealers dropped 2.6% in February, from the previous month. It was the biggest decline since January 2014, when bad weather also was a factor.

Excluding autos, retail sales were down just 0.1% last month.

Building materials and garden equipment stores, which are particularly vulnerable to weather, saw sales fall 2.3% in February.

Sales also were down in several other key categories.

Department store sales declined 1.4% last month, while electronics and appliance sales fell by 1.2%. Sales at restaurants and bars dropped 0.6%.

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