Weekly economic review & outlook
Substantial weather drag for February activity
March 22, 2021
You Need to Know
Week in review
Retail sales fell sharply during February
Worse-than-usual winter weather kept consumers indoors rather than at stores or restaurants, driving a 3.0 percent decline in retail sales.
Housing starts plummeted during February
The bad weather cut into home construction projects, too, as housing starts dropped by more than 10 percent.
New and existing home sales expected to dip
While underlying demand factors remain strong for home sales, the winter storms from last month likely had a negative impact on transactions.
Consumer spending likely to see a significant decline
Following a surge in spending fueled by stimulus payments, plus severe weather limiting consumer activity, personal consumption expenditures likely fell significantly for February.
Retailers saw a hangover for February after January’s stimulus-induced spending surge as cold and snowy winter weather cut into consumer behavior. Total retail sales were much weaker than expected, falling by 3.0 percent — the largest decline since the 2020 COVID shutdowns. Some of this was due to more sales being pulled into January, which saw a sharp upward revision from a monthly gain of 5.3 percent to 7.6 percent. Still, spending decreased across nearly all categories as fewer people went out to auto showrooms and stores. But even factoring in February’s decline, retail sales were up by a robust 6.3 percent relative to February 2020 when COVID impacts were just starting to hit the U.S. economy.