Weak February retail recovery signals cautious US consumers: TCB

24 Mar '25

2 min read

Weak February retail recovery signals cautious US consumers: TCB

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Insights

In February 2025, US retail sales saw a modest 0.2 per cent MoM recovery, driven largely by a sharp rebound in online spending, after January's steep decline.
Real retail sales remained flat, reflecting cautious consumer sentiment.
Control group sales increased by 1 per cent, but quarterly growth slowed significantly to just 0.6 per cent QoQ saar, highlighting consumer caution amid economic uncertainty.

In February 2025, the United States witnessed a weaker-than-anticipated recovery in retail sales after a steep drop in January, reinforcing projections that consumer spending will decelerate this year, potentially weighing on broader economic growth, according to The Conference Board (TCB). Real retail sales, adjusted by the consumer price index (CPI), remained flat following a prior 1.7 per cent drop. Online retail sales rebounded sharply, reversing January’s decline.

The headline retail sales edged up by a modest 0.2 per cent month-over-month (MoM) in February, following a downwardly revised 1.2 per cent drop previously. Consumers shifted towards online spending, pulling back from discretionary purchases like cars, furniture, and electronics, as per The Conference Board’s report.

Control group sales, which exclude cars, gas, food services, and building materials and directly enter the calculation of GDP growth, increased by 1 per cent in February following a decline of a similar magnitude in the month prior.

On net, with two months of data for the first quarter (Q1) in hand, control group sales grew by just 0.6 per cent quarter-over-quarter, seasonally adjusted annual rate (QoQ saar), the slowest pace of growth since the pandemic.

While the data are not suggesting consumer is in a crisis mode by any means, the latest report does show consumers are becoming more cautious amid uncertain economic outlook and rising prices.

Fibre2Fashion News Desk (SG)

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