Consumers spent last month at a slow pace at an ongoing pace of economic concerns.
Consumers returned to spending methods on local retailers and digital platforms in February after a sharp drop to launch the New Year.
This was not enough for the 0.6% consensus prediction.
Online retailer receipts skyrocketed by 2.4%, followed by sales at health and personal care stores (1.7%) and restaurants (0.4%).
Foodservice and drinking establishment transactions fell sharply by 1.5%, while gasoline bureau sales fell by 1%.
Retail sales management groups excluding non-core sectors such as building materials stores, car dealers, food service and gasoline departments surged at 1% higher than expected. This rises from the downwardly adjusted 1% slide in January.
Related Stories
Market watchers pay attention to this indicator as they contribute to the calculation of GDP.
Overall, in the 12 months that ended in February, retail sales inflation slowed from 3.9% to 3.1%.
Consumers show the worst
Market analysts initially rejected the unfortunate January numbers, denounced serious winter weather, California wildfires and post-holiday hangovers.
Ted Rossman, senior industry analyst at Bankrate, says retail sales figures for February could continue to provide a growing narrative of economic growth outlook under attack.
“Already due to rising prices and concerns about tariffs, consumer confidence has been a huge hit in recent weeks. There’s an increasing number of evidence that consumers are pulling back,” Rothman said in a statement to the Epoch Times.
A recent wave of research shows that consumers are expressing concern about high uncertainty regarding public policy and other economic factors.
The one-year inflation outlook rose to a 29-month high of 4.9%, and the five-year horizon rose to 3.9%.
“The bottom line is that consumer sentiment is getting worse at an incredible rate,” Apollo chief economist Torsten Sloak said in a note to the Epoch Times.
Frequent twists and turns of policy making can have a negative impact on consumers and make future planning more difficult for households.
Market reaction
Investors have over the surface rejected lower than expected retail sales figures as the main benchmark averages remained flat before the opening bell.
The New York Stock Exchange (NYSE) is standing on Wall Street in New York City on March 5th, 2025. Spencer Platt/Getty Images
Financial markets shook in March, sweeping out trillions of dollars worth.
Traders panicked at President Donald Trump’s tariff plans and increased concerns that the US could plunge into a recession.
Wall Street typically views trade taxes as negative because businesses eat the additional costs of higher import duties or pass it on to consumers in the form of higher prices, says Karen Roche, the Discipline Fund’s Chief Investment Officer and Founder.
During the first round of tariffs in Trump’s first period, many companies chose to absorb the extra costs rather than raising prices. This was seen in the differences between the consumer price index and the producer price index, a measure of the prices paid by companies for goods and services.
Are the conditions different this time?
The Organisation for Economic Co-operation and Development (OECD) has been ringing the alarm bell, saying that if Trump continues to trade actions, growth will slow and prices will rise.
Goldman Sachs chief economist David Merricle says tariffs are likely to result in a one-off change in price levels rather than a major change in the pace of inflation.
“I think it’s a bit surprising compared to what you might have expected a few months ago, and a bit surprising compared to how concentrated businesses and consumers are on tariffs,” Mericle said. “At least, this is something to be noted: there is a risk that tariffs will cause wider price increases.”
Treasury Secretary Scott Bessent suggests that tariffs could trigger a one-off price adjustment despite their indifferent concerning “all continuum” inflation.
