U.S. Retail Sales (February 2026)

U.S. retail sales rebound in February 

• Retail sales bounced back by 0.6% month over month (m/m) in February, marking the first increase since November 2025. The headline figure landed just above expectations, with the consensus forecast calling for a 0.5% m/m gain.
• This uptick in retail sales was driven by an improvement in autos and parts, which climbed 1.2% m/m, while sales at gasoline stations moved up by 0.9% m/m. Building and garden retailers kept their momentum, notching a fourth straight monthly increase (+0.4% m/m). 
• Looking at the “control group”—which sets aside the categories above—sales also turned higher (+0.5% m/m). Sales were up across most categories, but the biggest movers were health & personal care (+2.3% m/m), clothing stores (+2.0% m/m) stores, and retailers selling sporting goods and books (+1.3% m/m), all rebounding from weather-related weakness in the prior month. Furniture stores (-1.0% m/m) and food & beverage stores (-1.0%) were the only categories where sales declined. 
• After a couple of quieter months, spending at bars and restaurants - the only service category included in the report - perked up, inching higher by 0.4%.

Key Implications

• This was a solid report, with retail sales rebounding in February following weather related weakness in January. Still, even with today's increase, retail sales volumes are up about 1% in inflation adjusted terms from their year-ago level, suggesting consumers are remaining somewhat watchful. With the labor market having softened and price levels elevated, it's no wonder consumers are cautious. And that was even before the latest price shock stemming from the spike in gas prices, which are up 35% in the month of March and currently sit at just over $4 per-gallon. While higher prices at the pump may lift retail sales in March – since those are reported in nominal terms – real spending might take a hit as consumers look to offset higher fuel costs with reduced spending discretionary items, with spending on travel and recreation the most likely areas to be cut. 
• Our latest forecast suggests that the price shock will be relatively brief. As a result, we anticipate consumer spending will average approximately 2.3% (annualized) for the year, down from the 2.6% growth recorded in 2025. Nonetheless, the situation remains fluid and should it persist for an extended period of time, high gas prices, continued declines in equity markets, and higher-than-expected mortgage rates—especially during the busy spring buying season—present downside risks to the outlook.

Disclaimer

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