United States: Retail sales stay soft in February
Latest reading: Retail sales grew 0.2% month-on-month in seasonally adjusted terms in February (January: -1.2% mom). That said, the rise was only a third of market forecasts, which together with the January data points to weak consumer spending at the outset of the year. Consumer confidence has tanked in recent months on tariff fears, which likely explains in part the weak retail data.
On an annual basis, retail sales rose at a more moderate pace of 3.1% in February (January: +3.9% yoy).
Panelist insight: TD Economics’ Ksenia Bushmeneva said:
“For the year as whole, consumer spending is expected to be much softer. U.S. consumers are getting nervous about the intensifying trade fight which is fanning flames consumer anxiety about inflation. […] Even as the labour market continues to hold up reasonably well and household wealth is still significant, the drop in sentiment will likely manifest in weaker spending over the coming quarters.”