Total retail sales inch up in February but miss estimates
Consumers are still spending, but at a slower pace compared to recent months.
Core retail sales (excludes automobile dealers, gasoline stations and restaurants) rose 0.9% month-over-month in February, based on data from the U.S. Census Bureau. Sales fell 0.2% year-over-year because of the comparison against unusually high sales in February 2024, according to the National Retail Federation.
The results come as many of the country’s biggest retailers, including Walmart, have issued cautious to downbeat guidance for the current fiscal year, and as consumer confidence has fallen.
[READ MORE: Consumer confidence down sharply in February]
Overall retail sales in February were up 0.2% in February, less than analysts expected, and up from January’s downwardly revised 1.2% decline.
February sales got a boost from online spending, which rose 2.4%. Sales at health and personal care stores increased 1.7%. Sales declined the most at department stores (-1.7%), restaurants and bars (-1.5%) and at gasoline stations (-1%).
“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,” stated NRF chief economist Jack Kleinhenz. “Moreover, these results show that households are apprehensive and carefully navigating lingering inflation and turmoil related to changing economic policies.”
Despite the softer spending, consumer fundamentals remain healthy and intact so far, supported by low unemployment, steady income growth and other household finances, Kleinhenz added.
“American shoppers will likely continue to spend as long as unemployment remains low and job growth continues,” he said.
The results come after core retail sales grew 4.2% year-over-year during the 2024 holiday season and 3.6% for the full year.
Last week, the CNBC/NRF Retail Monitor, powered by Affinity Solutions, reported that core retail sales were down 0.22% in February but up 4.11% year-over-year.
