US retail spending experienced a monthly decline in February, primarily attributed to consumer apprehension stemming from newly announced tariffs, according to the latest CNBC/NRF Retail Monitor, powered by Affinity Solutions, released by the National Retail Federation (NRF). Despite the monthly dip, year-over-year figures indicate continued growth, reflecting a generally robust economy.
“Consumer spending dipped slightly again in February due to the combination of harsh winter weather and declining consumer confidence driven by tariffs, concerns about rising unemployment and policy uncertainty,” stated NRF President and CEO Matthew Shay. “Unease about the probability of inflation and paying higher prices for non-discretionary goods has the value-conscious consumer spending less and saving more. But for the moment, year-over-year gains reflect an economy with strong fundamentals.”
The Retail Monitor revealed that total retail sales, excluding automobiles and gasoline, decreased by 0.22% seasonally adjusted month over month. However, on an unadjusted year-over-year basis, sales increased by 3.38%. Core retail sales, which also exclude restaurants, followed the same trend, falling by 0.22% month over month but rising by 4.11% year over year.
The February downturn coincided with President Donald Trump’s announcement of tariffs on goods from China, Canada, and Mexico. While tariffs on Canada and Mexico were subsequently delayed, the tariffs on Chinese goods were doubled. This announcement appears to have impacted consumer sentiment, as the University of Michigan’s Index of Consumer Sentiment fell significantly in February.