U.S. Retail Sales Unexpectedly Fall for Third Straight Month
U.S. retail sales unexpectedly fell in February for a third month, adding to signs that consumer spending will cool this quarter from the previous period’s hot pace, according to Commerce Department figures released Wednesday. The results indicate consumer spending, the biggest part of the economy, is easing after strong gains in the fourth quarter. Shoppers may be taking a breather following a run-up in borrowing in late 2017, and relatively tepid wage growth is limiting Americans’ purchasing power. In addition to declines at auto dealers and gas stations, February’s figures reflected lower demand at furniture and home furnishing stores, electronics and appliance vendors, food and beverage sellers and health and personal care stores. General merchandise stores saw a 0.4 percent decline in receipts, the most since May, following a similar advance in January. On the brighter side, building-material stores reported a 1.9 percent sales gain in February, following a 1.7 percent decline. Even with the latest sluggish sales figures, job-market strength, rising property values and lower taxes are buoying Americans’ sentiment and should support steady gains in spending. Consumption was probably sufficient to keep Federal Reserve policy makers on track for a widely expected interest- rate increase next week.
Euro-Area Industrial Output Falls by Most in More Than a Year
Industrial production in the euro area started 2018 with its weakest monthly performance in over a year, adding to evidence that regional economic pickup may be coming off the boil. Output declined 1 percent in January from December, the European Union’s statistics office in Luxembourg said on Wednesday, citing fall in the production of energy, and durable and intermediate goods. That’s the worst monthly reading since late 2016 and falls short of the 0.5 percent decrease predicted in a Bloomberg survey of economists. The figures constitute another data point suggesting momentum in the 19-country region might be tapering off again after a bumper 2017. Still, the European Central Bank raised its full-year growth forecast for the year last week and now sees the fastest economic expansion since 2007. Among countries, decreases were registered in the Netherlands and Spain, Eurostat said. Germany, the region’s biggest economy, barely eked out a rise. From a year earlier, industrial production rose just 2.7 percent, its smallest increase since April 2017.
Singapore’s 2018 Growth Forecast Gets an Upgrade in MAS Survey
Singapore economy watchers see stronger growth and fewer exports amid rising trade protectionism worries, compared with their views in December, according to a Monetary Authority of Singapore survey. Growth will stay solid at 3.2 percent in 2018 after 3.6 percent last year, according to the poll’s median. That’s higher than the 3 percent median forecast in the December survey. At the same time, the share of respondents who cited trade protectionism as a downside risk more than doubled to 88 percent from 40 percent. The growth upgrade is mainly attributable to brighter projections for wholesale and retail trade and accommodation and food services. Private consumption also was revised upward, while manufacturing’s gain was trimmed. The forecast for the unemployment rate this year was unchanged at 2.1 percent. Inflation projections, too, held at their previous rates — 1 percent for the all-items consumer price index and 1.6 percent for the MAS core inflation gauge.