US retail sales rose only 0.2% in February from the prior month, according to the Commerce Department’s latest report. This marked a significant slowdown compared to economists’ expectations of a 0.7% increase.
The weaker-than-expected sales figures come as consumers are becoming increasingly cautious due to high levels of uncertainty sparked by President Donald Trump’s trade spat with key trading partners. Retailers are now sounding the alarm, warning that consumers are feeling stretched and reluctant to spend.
Sales declined in department stores (-1.7%), restaurants and bars (-1.5%), and gasoline stations (-1%). However, online sales and those at health stores rose 2.4% and 1.7%, respectively.
Excluding gas stations, car dealerships, building materials, and restaurant sales, retail spending actually rose 1% in February, beating economists’ projections of a 0.4% gain.
“This is not the reassurance investors were hoping for from the US consumer,” said Jonathan Moyes, head of investment research at Wealth Club. “The US consumer is starting to look peaky.”
Retail executives have warned that consumers are struggling due to inflation and financial constraints, with many reporting they can only afford basic essentials. Walmart, America’s largest retailer, expects sales and profit to slow this year, citing uncertainties related to consumer behavior.
The Federal Reserve is now navigating an economic puzzle, with some economists warning of “stagflation” – a scenario where growth slows or declines as inflation accelerates. Despite the uncertainty, officials still believe the economy will continue to grow, but only time will tell how long this trend can sustain itself.
Source: https://edition.cnn.com/2025/03/17/economy/us-retail-sales-february/index.html