New data released by the U.S. Census Bureau reveals a modest increase in retail sales for February, signalling a cautious approach by consumers grappling with inflation concerns and uncertainty surrounding Washington policy decisions.
According to National Retail Federation (NRF) Chief Economist Jack Kleinhenz, the slight 0.2% month-over-month growth in overall retail sales reflects a degree of consumer apprehension, despite the underlying strength of the U.S. economy.
“Lower-than-expected consumer spending in the first couple of months of the year likely reflected payback for very strong spending in the fourth quarter and weather-related events since then,” Kleinhenz explained. “Moreover, these results show that households are apprehensive and carefully navigating lingering inflation and turmoil related to changing economic policies.”
However, Kleinhenz emphasised that the fundamental pillars of consumer spending remain robust. “Regardless of the softer spending, consumer fundamentals remain healthy and intact so far, supported by low unemployment, steady income growth and other household finances. American shoppers will likely continue to spend as long as unemployment remains low and job growth continues,” he stated.
The Census Bureau reported that overall retail sales increased by 0.2% seasonally adjusted month-over-month and 3.1% unadjusted year-over-year. This compares to a 1.2% month-over-month decrease and a 3.9% year-over-year increase in January.