Consumers rein in spending

The US economy just got another warning sign for a slowdown in the latest retail sales data. Spending is shifting and consumers are pulling back on discretionary purchases, which suggests shaky confidence in the economic outlook. Yet while cracks are forming in the data, inflation does seem to be moving in the right direction. The Federal Reserve will have to parse through the mixed signals to figure out what the best course of action is. Remember, slowdowns aren't announced with headlines. They usually reveal themselves months after the fact.

Retail Dive once again crunched the Commerce Department's retail sales numbers -- the right way -- so you don't have to. In the segments we cover, retail sales were pretty much flat compared to last February (which had an extra day) and volumes were down. More here in our tracker, with special thanks to GlobalData's Neil Saunders, Fitch Ratings's David Silverman, CFA , and analysts and economists from Wells Fargo.

Markets Rebound, but Uncertainty Lingers—What’s Next? Stocks extended their rally today, but a weak retail sales report has investors debating whether rate cuts are on the horizon—or if a recession is looming. 📈 Dow: +353 points (+0.85%) 📈 S&P 500: +0.65% 📈 Nasdaq: +0.31% 🔹 Retail sales rose just 0.2%, missing expectations—but a strong control group number suggests underlying consumer spending remains solid. 🔹 Big Tech was mixed—Nvidia and Tesla lagged, while Walmart and IBM lifted the Dow. 🔹 Treasury Secretary Bessent warned there are “no guarantees” the U.S. avoids recession as markets adjust to shifting trade policies. Up next: The Fed’s rate decision on Wednesday. No change is expected, but all eyes are on their outlook for the rest of the year. Is this a buy-the-dip moment, or do you see more downside ahead? Let me know in the comments!👇 #LITrendingTopics #FinancialAdvisor #StockMarket #Investing #Economy

Retail sales rose little in February. Failed to offset January's sharp plunge. US retail trade and food service sales rose just 0.2% in February, according to data from the US Census Bureau. Trade sales excluding food service rose a stronger 0.5%. The relatively weak performance of overall sales is somewhat of a surprise, since some bounce-back had been expected from the unusually sharp decline in January. After adjusting for inflation, total sales were essentially unchanged in February after plunging 1.7% in January. January's sharp retail spending drop was due largely to a decline in sales of motor vehicles and parts. Sales at non-store retailers—primarily online vendors—were also weak in January. Vehicle sales continued to decline (slightly) last month, while non-store retail sales rebounded. Other areas that contributed to February weakness included food services and gasoline station sales. Like many monthly indicators, data on retail sales are very volatile from month to month. Over the past three months, real retail and food service sales have dropped at a more than 5% annual pace. Of course this is primarily due to the sharp January decline. Heading into tomorrow's FOMC meeting, these data suggest that consumer sales remain sluggish but are not falling apart. They are unlikely to prevent the Fed from holding the line on rates. Looking forward, these data give us some idea of what to expect for the commodity portion of personal consumption expenditure, when it comes out later this month. The "control group" measure, which corresponds most closely to the PCE measure has dropped only slightly over the past three months in inflation adjusted terms. Recall, however, that goods make up only about a third of total consumer spending, and so are not a good indicator of how total consumer spending is faring. These data for February are too early to say much about how consumers might be reacting to policy shifts and the general chaos surrounding Trump Administration actions. I would expect clearer signs of softening—at least temporarily—when first quarter numbers are in the books. #retailsales #consumerspending #TrumpAdministration #FederalReserve #FOMC #interestrates

 Shoppers from all different economic spectrums are showing some angst. CEOs talked about a slowdown in spending during their earnings calls and the latest government report showed disappointing gains. See our story. U.S. shoppers stepped up their spending just a bit in February after a sharp pullback the previous month, signaling that Americans are shopping more cautiously as concerns about the direction of the economy mount. Retail sales rose just 0.2% in February, a small rebound after a sharp drop of 1.2% in January, the Commerce Department said Monday. Sales rose at grocery stores, home and garden stores, and online retailers. Sales fell at auto dealers, restaurants, and electronics stores. The small increase suggests Americans may be growing more wary about spending as the stock market has plunged and President Donald Trump’s tariff threats and government spending cuts have led to widespread uncertainty among consumers and businesses. by Chris Rugaber and Anne D'Innocenzio The Associated Press

Not much bounceback in February retail sales from a very weak January. The control group that feeds into GDP was strong, but weak auto sales and restaurant spending are a cause for concern. The US consumer looks fragile, and recession risk remains high.

According to new statistics, the U.S. retail apparel market may be stalling. Sales were up just 0.5% in the first two months of 2025 compared to the same period in 2024, while topline retail sales rose 1.8%. Apparel prices jumped in February, rising 0.6% over January. For the twelve months ending February 2025, apparel prices are up 0.6%, rebounding from a 1.4% decline in January. However, apparel price inflation remains well below overall consumer inflation of 3.1% (less volatile food and energy) for the first two months of 2025. Higher apparel prices may be affecting retail sales and dampening consumer moods. The University of Michigan reported an 11% decline in its March consumer survey, adding that uncertainty surrounding tariffs has also adversely affected consumers’ attitudes. With only two months of retail sales data reported so far, it’s too early to say that the market is retreating, but we will need to monitor key indicators closely. #apparel #retail #CPI #inflation #demand #consumers #tariffs #market 

Uncertainty Reigns Supreme In The US Retail Sector The latest US retail sales data for February 2025 paints an intriguing picture of the American consumer landscape. With nominal retail sales and food services growth at 3.1% y-o-y and real growth at just 0.3% y-o-y, we're seeing a slight deceleration from previous months. Key takeaways: • E-commerce continues to outperform, growing 5.4% y-o-y nominally and 2.5% in real terms. • Household furnishings show strong growth, rebounding from inflationary contractions. • Real retail sales are 14% higher than pre-pandemic levels, showcasing enduring consumer strength. • Consumer confidence indices are declining, despite low unemployment and steady GDP growth. The paradox here is striking. While headline economic figures appear robust, there's a growing disconnect with consumer sentiment. This divergence can be attributed to several factors: - President Trump's aggressive economic policies - Fears of resurging inflation eroding purchasing power - Income growth lagging behind living costs - Economic uncertainty fuelled by heavy tariffs on major trade partners As we move further into 2025, keep an eye on these consumer sentiment indicators. They might be the canary in the coal mine, signalling potential shifts in spending patterns before they manifest in the broader economic data.