US retail sales rose 0.6% in February

Two days after inflation data for the month of February was published by the US Department of Labor, this Thursday the Department of Commerce indicated that retail sales increased 0.6% last month.

According to the report, Retail spending in the United States recovered although consumers still remain cautious in the face of high prices for food, goods, services, gasoline and rent coupled with high interest rates.

In this regard, Navy Federal Credit Union corporate economist Robert Frick mentioned that the February numbers “were not a solid result given that a larger rebound was expected from January. “Consumers have the money, as inflation-adjusted incomes have been increasing, so the question is: have consumers become cautious?” he questioned.

Excluding the more volatile measures of gasoline and automobiles, retail sales rose just 0.3% in February, the report said. For that reason. Frick indicated that “it is too early to say, But with inflation stuck above 3% for now and the labor market getting tighter, that’s a possibility that spending has also stalled.”he said especially on discretionary spending.

It is for this reason that Kayla Bruun, senior economist at Morning Consult, pointed out that “headwinds continue to discourage certain purchases. High interest rates, a rise in energy costs and persistent discomfort with price levels continue to push consumers to make compromises in budgeting, with categories of goods increasingly ignored in favor of spending on services,” he said.

In details, according to the Department of Commerce report Retail sales saw an uptick in spending on appliances, dealerships, spare parts, gas stations, restaurants, bars, among others. However, spending on clothing, personal care, furniture and household items was reduced.

Finally, although the labor market has been solid in recent months, especially with wage increases that partly boosted Americans’ spending Economists anticipate that with rising interest rates and the resumption of student loan payments, consumers will remain cautious.

Keep reading:

• Private sector added 140,000 jobs in February, according to new report
• U.S. Small Business Owners More Optimistic About Economy, Survey Finds
• The US producer price index rose 0.3% last month