ALEXANDRIA, Va.—Gas stations lead U.S. retail sales gains in February, with sales up 5.3% compared with January as overall retail sales showed a seasonally adjusted 0.3% increase last month compared with January, according to retail sales data for February released by the U.S. Commerce Department this morning.
Sales at food services and drinking places rose 2.5%, and sales of autos and auto parts were up 0.8%. Compared with February 2021, sales at gas stations climbed 36.4%, while sales at food service and drinking places were up 33% from last year, according to U.S. Census Bureau data. Meanwhile, sales at grocery stores fell 0.8% from January but gained 8.4% from the year-ago period.
Compared with February 2021, overall retail sales were up 17.6%.
The National Retail Federation Tuesday forecast that retail sales will grow between 6% and 8% to more than $4.86 trillion in 2022, according to a news release.
“NRF expects retail sales to increase in 2022, as consumers are ready to spend and have the resources to do so,” NRF President and CEO Matthew Shay said. “We should see durable growth this year given consumer confidence to continue this expansion, notwithstanding risks related to inflation, COVID-19 and geopolitical threats.”
NRF forecasts that 2022 retail sales will total between $4.86 trillion and $4.95 trillion. The numbers exclude automobile dealers, gasoline stations and restaurants. Non-store and online sales year-over-year, which are included in the total figure, are expected to grow between 11% and 13% to a range of $1.17 trillion to $1.19 trillion as consumers continue to utilize ecommerce.
The retail group also expects GDP growth to be sluggish this year but at 3.5%—higher than CNBC’s outlook.
“Most households have never experienced anything like this level of inflation, and it is expected to remain elevated well into 2023,” NRF Chief Economist Jack Kleinhenz said. “In addition to inflation, the forces impacting the economy include COVID-19 impacts, international tensions and policy variability.
Kleinhenz added that although a roller coaster ride of incoming data is expected in the next few months, consumer fundamentals remain in place. Household finances are healthy and strong job and wage growth should support solid growth for consumer spending for 2022.
Recession Worries Mount
The chance that a recession could happen to the U.S. economy in the next 12 months has grown from 23% to 33%, reports CNBC. Forecasters raised their economic outlook amid fast-rising prices and greater uncertainty from Russia’s invasion of Ukraine.
The Federal Reserve’s two-day meeting ends today, and analysts widely expect the Fed to raise interest rates a quarter point to cool off inflation. CNBC’s latest Fed Survey forecasts that the Fed will raise rates an average of 4.7 times this year, bringing the funds rate to end the year at 1.4% and to 2% by the end of 2023. Nearly half of the survey respondents see the central bank hiking rates five to seven times this year.
CNN reports that the economy has flashed a recession warning sign: The yield curve is flattening. Investors keep a close watch on the spread between short-term government bond yields, particularly the two-year Treasury, and longer-term bond rates, such as the 10-year Treasury.
If the spread diminishes, investors become concerned that the yield curve could eventually invert, meaning short-term rates would be higher than long-term yields. An inverted yield has often signaled a recession. It inverted in 2019 before the 2020 COVID-19-induced recession, as well as in 2007 before the 2008 Global Financial Crisis/Great Recession. And it inverted in early 2000 right before the dot-com/tech stock meltdown.
U.S. Labor Secretary Marty Walsh told CNN that a recession is "a real likelihood," but he added that "we have a very strong economy" and noted that the job market in particular is healthy.
However, most of the respondents from CNBC’s Fed Survey do not see a recession as a base case. Their GDP forecast for 2022 went down 0.8 percentage point but is still slightly above trend at 2.8%. Ninety percent of respondents raised their inflation forecast because of the Russian invasion, and 60% shaved the GDP forecasts due to the conflict.
Despite inflation increases and diminished growth outlooks, the survey respondents were positive on stocks. Respondents lowered their outlook for equities, but only 53% now say stocks are overvalued relative to the outlook for earnings and growth. That’s down from 88% a year ago, and the least bearish respondents have been since the COVID-19 pandemic began.
Get an overview of NACS benchmarking data on the convenience and fuel retailing industry’s performance in 2021 and a look ahead at the NACS State of the Industry Summit, April 12-14 in Chicago.