Personal consumption expenditures (PCE) for clothing and footwear declined a seasonally adjusted 4.9 percent to $419.06 billion last month compared to January’s $440.79 billion spend. PCE in the category has now declined four out of the past five months, according to BEA data.
Earlier this month, Matthew Shay, president and CEO of the National Retail Federation (NRF), said a number of factors contributed to the monthly slowdown from unusually high numbers in January, including major snowstorms in the Northeast and unprecedented ice storms in the South.
The NRF and the Census Bureau reported that clothing and clothing accessories store sales were down 2.8 percent month-over-month.
BEA said overall PCE in February decreased 1 percent, or $149 billion, for the month. The PCE price index increased 0.2 percent. Excluding food and energy, the so-called core PCE price index was up 0.1 percent. Real PCE, adjusted for inflation, decreased 1.2 percent–goods fell 3.3 percent and services dipped 0.1 percent.
The decline in PCE in February reflected a decrease of $155.9 billion in spending for goods and a $7 billion increase in spending for services. Within goods, the decreases were widespread across most categories, led mainly by pharmaceutical products and recreational items, according to BEA. Partly offsetting these decreases was an increase in gasoline and other energy goods.
Personal income decreased 7.1 percent, or $1.52 trillion, while disposable personal income (DPI), a key gauge for retail sales, fell 8 percent, or $1.53 trillion. Real DPI decreased 8.2 percent in February.
BEA said the estimate for February personal income and outlays was impacted by the continued government response to COVID-19. Economic impact payments associated with the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021, enacted on Dec. 27, declined sharply in February and unemployment benefits continued, but at a lower level. In addition, restrictions and closures continued in some areas of the country.
The decrease in personal income in February was mainly attributable to a decrease in government social benefits. The CRRSA Act authorized a round of direct economic impact payments that were mostly distributed in January.
Personal outlays decreased $141.5 billion in February. Personal saving was $2.41 trillion in February and the personal saving rate–personal saving as a percentage of disposable personal income–was 13.6 percent.