Preview: Due April 1 - U.S. February Retail Sales - Autos and gasoline to rise, trend now subdued
We expect February retail sales to see a modest bounce of 0.4% after a 0.2% decline in January, with sales ex auto increasing by 0.3% after two straight unchanged months. Ex autos and gasoline however we expect a rise of only 0.2%, down from 0.3% in January, keeping trend subdued.
Data from the auto industry shows sales reversing most of a January dip while gasoline prices saw a partial correction of a dip seen in January. Gasoline prices look sure to surge in March.
Weather may remain a restraint on February sales given a spell of bad weather though the recovery in autos suggests weather will be less of a restraint on sales than in January.
Consumer spending outpaced real disposable income in Q3 and Q4 of 2025 but real disposable income got a lift in January from lower taxes. This may provide some support in February, but come March any lift to real disposable income from lower taxes is likely to be outweighed by surging energy prices.
Sales ex auto and gasoline rise by 0.3% in January after a 0.1% increase in December and a 0.2% increase in February would confirm recent signs of a slowing in trend, with growth marginal in real terms. A weak February employment report argues against sales regaining underlying momentum in February.
