US retail sales rose 0.2% in February, driven by a surge in online store receipts and healthy gains in the fourth quarter. However, economists say consumers are pulling back on discretionary spending, sparking uncertainty about the economy’s growth pace.
Economists expect sales to slow down further due to concerns over inflation, job losses, and recession fears. The Federal Reserve is expected to leave interest rates unchanged, but may resume cutting borrowing costs in June if economic conditions worsen.
Core retail sales increased 1.0% in February, after a downwardly revised decline of 1.0% in January. Sales at restaurants and bars declined by the most in 13 months, pointing to softening discretionary spending.
The report from the Commerce Department suggests that consumers are becoming more cautious, with sales at food services and drinking places declining by 1.5%. Stock markets on Wall Street were higher, while longer-dated US Treasury yields slipped.
Source: https://www.reuters.com/markets/us/us-retail-sales-rebound-moderately-february-2025-03-17