REPEAT: MNI DATA ANALYSIS: US Feb Retail Sales Fall 0.1%>

Repeats Story Initially Transmitted at 12:30 GMT Mar 14

--February Retail Sales Ex. Auto, Gas, Bldg Mat, Food Service +0.1%

--February PPI +0.2%;+0.2% Ex. Food, Energy;+0.4% Ex Food, Energy, Trade

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The value of retail sales fell 0.1% in February, 

much weaker than the 0.4% gain expected by analysts, and were up only 

0.2% excluding motor vehicle sales, data released by the Commerce 

Department Wednesday showed. 

     Analysts have had a tendency of underestimating retail sales growth 

in February in recent years, especially for sales excluding motor 

vehicles, so today's data deviates from that trend. However, an MNI 

data preview pointed out downside risks to the forecasts, particularly 

for motor vehicles and gasoline sales, that did in fact pan out. 

--UNDERLYING SALES GROWTH IMPROVED, BUT SLOW

     February motor vehicle sales posted a 0.9% decline for the second 

straight month. Gasoline store sales were down 1.2% in February 

following a 1.9% gain in January, but food services and drinking places 

sales were up 0.2% after a 0.1% January gain. Building materials sales 

rebounded up to a 1.9% gain in February following a 1.7% decline in 

January. 

     Excluding autos, gasoline, and building materials, "control" retail 

sales rose only 0.1%. And for good measure, excluding food services 

as well as those three measures, retail sales were still up 0.1%. While 

both of these measures showed improvement from flat readings in January, 

underlying sales growth can still be seen as weak. 

     There were sales gains in clothing, sporting goods, and nonstore 

retailers offsetting declines in furniture, electronics, and at 

department stores. 

--FIRST QUARTER SALES STILL SOFT

     The retail sales data suggest that first quarter consumption is 

only modestly ahead of the fourth quarter average, which could be 

reflected in the first quarter PCE data released in a few weeks. 

     Incorporating the revisions to December and January, first quarter 

sales were up only 0.3% at an annual rate, while sales excluding motor 

vehicles were up 2.2% from the fourth quarter. Sales excluding autos, 

gas and building materials were up 1.4% and sales also excluding food 

services were up 1.0%. 

--PPI DATA CLOSE TO EXPECTATIONS

     Also released Wednesday, final demand PPI rose by 0.2% in February, 

slightly faster than expected, with a 0.2% gain outside of food and 

energy prices. 

     An analysis of MNI survey data showed no clear forecast risk for 

the February data. 

     The personal consumption price measure in the data, which some 

analysts use as a preview measure for PCE price index, rose by 0.2% and 

was up 0.4% ex. food and energy and still up 0.4% also excluding trade 

services, suggesting a modest upside risk to the PCE inflation data. 

     Energy prices fell 0.5% in the month, with gasoline prices down 

1.6%. However, residential natural gas prices rose 3.7%. Food prices 

were down 0.4%. 

     Trade services prices fell 0.2% in the month, while the core rate 

the BLS prefers, excluding the change in trade services as well as food 

and energy, was up 0.4% in February. 

--Y/Y INFLATION MOVES UP 

     The year/year rates for these measures indicated some overall 

acceleration. Overall PPI was up 2.8% year/year in February after a 2.7% 

year/year rise in January. 

     At the same time, the year/year rate for PPI excluding food and 

energy rose to 2.5% from 2.2% in January and the year/year rate for PPI 

excluding food, energy and trade services rose to 2.7% from 2.5%. 

     ** MNI Washington Bureau: 202-371-2121 **