February retail sales data released by the U.S. Census Bureau showed a slight month-over-month increase of 0.2%, with a 3.1% rise compared to the previous year. Despite this modest growth, consumer spending remains cautious, reflecting concerns over inflation and policy changes, according to Jack Kleinhenz, Chief Economist at the National Retail Federation (NRF).
Kleinhenz explained that the early-year slowdown follows strong fourth-quarter spending and disruptions caused by weather. While consumer apprehension persists, fundamentals such as low unemployment and steady income growth remain strong, supporting future spending trends as long as the job market stays robust.
Core retail sales, which exclude automobiles, gasoline, and restaurants, saw a 0.9% monthly increase but a slight decline of 0.2% year-over-year. This decline can be attributed to high sales in February 2024, distorting year-over-year comparisons.
Overall, retail sales growth remains healthy, following a 4.2% increase during the 2024 holiday season and 3.6% growth for the year. The NRF continues to track retail trends and consumer behavior to provide valuable insights for the industry.
