The US Census Bureau reported a 0.2% rise in overall retail sales for February when seasonally adjusted from the previous month, and a 3.1% increase when not adjusted year over year (YoY).
This contrasts with January’s figures, which showed a 1.2% MoM decrease and a 3.9% YoY increase.
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Core retail sales, which excludes automobile dealers, gasoline stations, and restaurants, reflects a 0.9% month-over-month increase after seasonal adjustments but shows a 0.2% decline unadjusted year over year.
This YoY comparison is affected by the high sales volume seen in February 2024.
On a three-month moving average basis, core sales were down by 1.2% YoY, again influenced by the previous February’s performance.
Following a 4.2% YoY increase in core retail sales during the holiday season of 2024 and a 3.6% rise for the entire year, the National Retail Federation (NRF)’s chief economist Jack Kleinhenz attributes the subdued consumer spending at the start of this year to a “payback” for robust fourth-quarter spending and recent weather-related events.
Kleinhenz explained: “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.
“Moreover, these results show that households are apprehensive and carefully navigating lingering inflation and turmoil related to changing economic policies.
“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.”
Data released by the CNBC/NRF Retail Monitor earlier this month (March) showed US clothing retailers experienced a month-on-month sales decline of 0.78% in February, as consumer confidence faltered due to concerns over tariffs.
However, there was a notable 3.75% year-over-year increase in clothing store sales, suggesting an underlying strength in the economy.
The levies, which include a 25% tariff on imports from Canada and Mexico and an additional 10% on the existing 10% tariffs on China products, have raised concerns about a potential negative impact on US fashion companies and consumers.
