Sales were higher on a year-over-year basis, led by a $6.0 billion, or 19.6%, increase in gasoline station sales. Non-store sales were a close second with a $5.7 billion, or 13.0%, rise in sales. The largest dollar decline in sales was seen in department stores, where sales were down $751 million, or 5.6%. The biggest percentage decline was in electronics and appliances, where sales were down $514 million, or 6.0%. Thus, while lower gasoline sales were a major factor in weak overall sales in February, they were a big factor in the yearly increase. At the same time, electronics and appliance store sales were weak on both a month-ago and a year-ago basis.
Just as the Fed looks at prices excluding gasoline to determine the underlying trend of inflation, doing the same thing for retail sales gives us a better look at the underlying trend of retail sales. With this measure of sales growing slower, today’s rate increase may a bigger thorn than many think.