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US retail sales fall 0.4% to $697B in February

US retail sales fell 0.4% to $697.9 billion in February, according to advance figures released Wednesday by the Commerce Department.

While retail sales fell more than estimates of a 0.3% decrease, they stood at $700.7 billion for a monthly gain of 3.2% in January.

On an annual basis, retail sales were up 5.4% in February, compared to the same month in 2022.

The contraction in the February figure indicates consumer demand is weak in the world’s largest economy after aggressive monetary tightening to fight inflation by the Federal Reserve.

Annual consumer inflation in the US came in at 6% in February, easing from 6.4% in January, according to figures released Tuesday. However, consumer inflation rose 0.4% from the previous month.

Last year, the Fed raised interest rates by a total of 425 points in seven rate hikes to fight record inflation, which jumped to a 40-year high in mid-2022. On Feb. 1, it raised its benchmark interest rate by 25 basis points — less than December’s hike of 50 basis points.

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