Retail sales declined in February, as consumers pulled back after a strong start to the year, amid high interest rates and inflation.
Spending at stores, online and in restaurants fell by a seasonally adjusted 0.4% in February, the Commerce Department said Wednesday. January sales were revised up to a 3.2% gain. Retail sales figures aren’t adjusted for inflation.
Consumers spent less at restaurants, auto dealerships and department stores and more on essentials like groceries and at health stores. Excluding often volatile auto sales, overall purchases decreased 0.1% in February.
A pullback in consumer spending, if sustained, would be a concern for the broader economy because household purchases represent about 70% of total economic output in the U.S.
Retail sales have been volatile of late, falling—on a seasonally adjusted basis—during the holiday season before a strong gain in January and retreat last month. Over the past year retail sales have advanced 5.4%, slightly slower than 6% consumer inflation.
The economy appeared to start the year on a strong note. Employers added more than 800,000 jobs during the first two months of the year and unemployment is trending near a half-century low.
