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March 13th, 2003, 11:29 AM #1
Consumers Snap Wallets Shut in February
39 minutes ago
By Anna Willard
WASHINGTON (Reuters) - War wary and snowbound American consumers snapped their wallets shut in February and the job market in March has yet to show any real sign of improvement, government reports on Thursday showed.
"With the job market faltering, the drop in retail sales is alarming. It's all going in the wrong direction, but if nothing else, it's just one month," said Bill Cheney, chief economist at John Hancock Financial Services.
The Commerce Department (news - web sites) said retail sales plunged 1.6 percent, the largest drop since November 2001 and far worse than the 0.4 percent dip expected by analysts. The report showed declines across a wide range of categories, from building materials to clothing and furniture.
Excluding spending on autos and gasoline, sales were still down 1.4 percent -- the largest slide since September 2001, when the economy was hit by the attacks on the World Trade Center and the Pentagon (news - web sites).
"It's a very disappointing report," said Cary Leahey, senior U.S. economist at Deutsche Bank Securities in New York. "It's somewhere between a bad and dismal report."
Financial markets shrugged off the weak data as investors focused instead on the idea that any military conflict in Iraq (news - web sites) would be short. The dollar strengthened against other currencies and the stock market jumped, with the Dow Jones industrial average up 196 points. However, U.S. Treasury bonds suffered their biggest single-session sell-off in two months.
Analysts pointed out that a large upward revision to the previous month's retail sales number took some of the sting out of February's report. January retail sales rose 0.3 percent after a previously reported fall of 0.9 percent.
"The economy got off to a good start in January but then we fell back in February, so the average for the quarter still might be OK," said Maury Harris, chief U.S. economist at UBS Warburg.
Several analysts also said consumers should return to the shops once the uncertainty surrounding a possible U.S. war with Iraq clears up, and they said snowstorms that hit the East Coast were a temporary factor.
"There is no question that consumer spending is soft ... (but) this weakness in consumer spending is what I believe to be a temporary reaction to disruptive weather and geopolitical risk," said Ken Mayland of Clearview Economics.
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March 13th, 2003, 12:30 PM #2
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- January 17th, 2005
March 14th, 2003, 10:56 AM #3
february 03 was, by far, our best month to date.
however, march has reversed our good fortune. we have been severely hurt by the new google algorithm. unfortunately, we are very dependent on SE positioning.
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