U.S. Feb. retail sales rise 0.6%, strong job market fuels household spending

Business at general merchandise stores rose 0.4%, while electronics and appliance stores had a solid 1.5% increase.

March 15, 2024 09:09 am | Updated 10:17 am IST - New York

Shoppers picked up their spending in February after a pullback the previous month, reflecting the mixed feelings Americans have in an economy where prices are up, but jobs are plentiful.

Retail sales rose 0.6% last month after falling a revised 1.1% in January, dragged down in part by inclement weather, according to the Commerce Department’s report on Thursday. February’s number was lifted in part by higher gas price and higher auto sales.

Excluding sales from gas stations and auto dealers, sales were up 0.3%.

Business at general merchandise stores rose 0.4%, while electronics and appliance stores had a solid 1.5% increase. Restaurants posted a 0.4% increase. Furniture and home furnishings stores saw a 1.1% decline. Online sales were down 0.1%.

Household spending is being fuelled by a strong jobs market and rising wages. But spending has become choppy in the face of rising credit costs and higher prices.

America’s employers continued to hire in February, adding a surprising 2,75,000 jobs, underscoring the U.S. economy’s resilience despite efforts of the U.S. Federal Reserve to knock down inflation by slowing spending.

While costs for many goods appear to have plateaued, consumer prices in the United States picked up last month, showing how a vibrant economic activity and strong consumer spending has made fighting inflation a complicated task for the Fed, and a potential headache for President Joe Biden’s bid for re-election. The most recent quarterly financial reports from big retailers like Walmart, Target and Macy’s show that their customers are looking for deals and in many cases sticking to the necessities when they shop. “They continue to shop but they are more constrained,” Target’s CEO Brian Cornell told The Associated Press in an interview last week.

“People are using credit cards to get through the month. Rent costs across the country are up, and gas has been volatile.”

Chris Riccobono, founder of New York clothing chain Untuckit. said that customers are waiting for sales. That is a break from the pandemic and he said this year he wants to cut back on the company’s reliance on discounts to drive sales.

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