Last week, the US Census Bureau recorded US retail sales up 9.5% year over year in February. This indicates a slowdown from the very strong vacation quarter and a 10.8% increase in January year over year. Economic impact payments issued in late December contributed to this increase. In this round of economic impact payments, checks for $ 600 were distributed to eligible persons if their AGI was less than $ 75,000 and the payments depreciated as annual income increased.
In January, most retail stores saw double-digit year-over-year and month-over-month sales. The year-on-year increase was led by retailers with an increase of 28.7% and sports, hobby, musical instrument and bookstores with an increase of 22.5%. Grocery store sales continued to show significant growth of over 11.1%. There were even significant improvements in department stores, as the category increased by 23.4% compared to the previous month. This was a significant increase over the store's previous sales.
While February sales declined in all categories except grocery stores, the decline is not a concern as year-over-year growth remains quite strong given the boost from vaccines and stimuli. In addition, the February numbers are a drop from an atypical January high and winter storms that had an impact on the already below average retail pedestrian traffic.
As for the February stimulus stimulus, the U.S. government passed the $ 1.9 trillion stimulus package, which included a third round of payments for economic impacts up to $ 1,400 on common filers. We expect additional stimulus-driven growth as payments for economic impact continue to go into consumer bank accounts.
One of the most common ways consumers spend their impulses is on bills, mortgages, rents, debts, and groceries. If we look at discretionary retail stores like department stores and apparel and apparel accessories, we see a sustained year-over-year decline as consumers continue to redistribute capital to other areas. Overall, however, retail, and in particular discretionary retail, does not capture a large portion of payments for economic impact. Although retail sales have been very high since that time a year ago and consumer confidence has been at its highest level, consumers are not spending evenly in retail as sales could be much stronger. But it's not just for consumers; Retailers need to continue their marketing efforts and investment in consumer experiences to capture more of the consumer paperbacks as February results show consumers are accessible to spend.
