Retail Sales rose 0.6% from January to February though this modest rebound was below estimates of an 0.8% gain. Sales in January were also revised downward from the originally reported 0.8% decline to a 1.1% decline when compared to December.
What’s the bottom line? After a strong holiday shopping season, consumer spending has cooled in the first quarter of this year. While January’s harsh weather certainly impacted sales at the start of the year, the growing use of credit cards and buy now pay later programs could also be contributing to slower spending as consumers pay back holiday season and other debts.
The Fed will be closely watching future Retail Sales reports, as the strength of our economy will also impact their monetary policy decisions this year.