February Retail Sales - Another Soft Month

In nominal terms, U.S. retail sales rose 0.2% in February, below forecast, and January data was revised to a 1.2% decline (compared to -0.9% originally reported).  Adjusting for inflation, U.S. retail spending was unchanged month-over-month, but advanced 0.3% year-over-year.  Today’s report adds to evidence that consumer spending is moderating amid tariff uncertainty and ongoing inflationary pressures.  Fed policymakers are widely expected to keep interest rates unchanged this week although updated economic projections and commentary from Jerome Powell could offer insights into the path forward.

• Real (inflation adjusted) retail sales advanced 0.3% year-over-year.  In February, retail sales grew 3.1% nominally netting growth of 0.3% after adjusting for 2.8% inflation.  Higher spending at online (+6.5%) and misc. store retailers (+5.0%) was partially offset by slower growth in restaurant dining (+1.5%) and declines at the pump (-0.3%).  Seven of thirteen categories advanced in real terms.
• Real (inflation adjusted) retail sales unchanged month-over-month.  In February, nominal retail sales levels grew 0.2% compared to January (consensus +0.6%) netting no change after adjusting for 0.2% inflation.  Online retail spending increased 2.4% month-over month, partially offsetting declines in motor vehicles (-0.4%) gas stations (-1.0%) and restaurants (-1.5%).  Only three of thirteen categories increased in real terms.