February Retail Sales - Delayed Data Shows Broad Advance

A delayed report showed retail sales rebounded by more than expected in February as consumers stepped up spending after a slower start to the year.  In nominal terms retail spending was up 3.7% year-over-year and 0.6% compared to January.  Adjusting for inflation, spending rose 1.3% year-over-year and 0.3% month-over-month.  Following a lengthy winter storm in January, tax refunds and wage growth that is outpacing inflation helped drive a February recovery.  It appears consumer demand was holding up ahead of the Iran war but the conflict has driven gas prices above $4 per gallon, which risks causing shoppers to adjust their spending in other areas if the conflict drags on.

• Real (inflation adjusted) retail sales rose 1.3% year-over-year.  In February, retail sales grew 3.7% nominally netting real growth of 1.3% after adjusting for 2.4% inflation.  Higher spending at brick-and-mortar retailers (+10.2%), online (+7.5%) and in restaurants (+5.2%) was partially offset by declines at the pump (-0.7%).  Nine of thirteen categories advanced in real terms.
• Real (inflation adjusted) retail sales rose 0.3% month-over-month.  In February, nominal retail sales levels increased 0.6% compared to January netting real growth of 0.3% after adjusting for 0.3% inflation.  Growth was driven by stronger spending on motor vehicles (+1.2%) and at brick-and-mortar retailers (+1.1%) and gas stations (+0.9%).  Ten of thirteen categories advanced in real terms.