American consumers came roaring back in February, with retail sales beating expectations across the board and snapping a two-month streak of disappointing readings.
Retail and food services sales rose 0.6 percent in February to a seasonally adjusted $738.4 billion, the Commerce Department said Wednesday. That handily topped the 0.4 percent gain economists had forecast. January’s decline was revised to 0.1 percent from the initially reported 0.2 percent drop.
From a year earlier, retail sales were up 3.7 percent.
The strength was not just in the headline. Sales excluding autos rose 0.5 percent, topping the 0.3 percent consensus. Stripping out both autos and gasoline, sales gained 0.4 percent against a 0.2 percent forecast. The so-called control group, which feeds into the government’s calculation of consumer spending in gross domestic product, also rose 0.4 percent.
The gains were broad-based. Health and personal care stores led the way with a 2.3 percent jump. Clothing and accessories rose 2.0 percent. Sporting goods, hobby, and book stores gained 1.3 percent. Motor vehicle and parts dealers, which had been a major drag in January, rebounded 1.2 percent. Miscellaneous store retailers rose 1.1 percent.
Nonstore retailers, a category dominated by e-commerce, edged up 0.7 percent and were up 7.5 percent from a year earlier. Food services and drinking places, a closely watched barometer of discretionary spending, rose 0.4 percent and were up 5.2 percent year over year.
The weakness was confined to a handful of categories. Furniture and home furnishings fell 1.0 percent and were down 5.6 percent from a year ago, the worst year-over-year performance in the report. Food and beverage stores also declined 1.0 percent. General merchandise was flat on the month, though department stores bounced 3.0 percent after a sharp 6.0 percent decline in January—a gain that still left them down 5.4 percent year over year.
For the three-month period from December through February, total sales were up 3.1 percent from the same period a year earlier.
The report is likely to ease concerns that had built after back-to-back soft readings in December and January, which had raised questions about whether the consumer was finally losing momentum. The February data suggest the earlier weakness owed more to seasonal factors and harsh winter weather than to a fundamental pullback in household spending.
Retail sales are not adjusted for inflation, but with goods prices nearly flat on the month and up just one percent over the past year, according to the most recent consumer price index report, the February gains largely reflect increases in the volume of goods purchased rather than higher prices.
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