Spending among American consumers rose 0.2% in February, rebounding from a sharp pullback the previous month, the Commerce Department said on Monday.
Why it matters: Overall spending recovered less than expected from a slow start to 2025. But the details of the report are more encouraging, offering some relief about the health of the economy.
Details: Economists expected retail sales would rise 0.5% in February.
- The headline figure was dragged down by a pullback in spending at gasoline stations, which fell 1% in February, likely as a result of lower gas prices. The data is not adjusted for inflation.
- There was a slump in retail sales for autos and car parts, down 0.4%.
Yes, but: Excluding gasoline and auto sales, overall retail spending rose a healthy 0.5%.
- Among the categories with the largest spending increases: e-commerce sites (+2.4%), health and personal care stores (+1.7%) and grocery stores (+0.4%).
The other side: Aside from gas stations, consumers spent less at department stores (-1.7%), dining establishments (-1.5%), and clothing stores (-0.6%).
What to watch: Tariff policy and federal workforce cuts have weighed on consumer sentiment.
- That, alongside other surveys showing cooling economic activity, has stoked concerns of an economic slowdown.
- The retail sales report shows that as of February, plummeting consumer sentiment did not translate into a drastic spending pullback.
