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Last month, American consumers kept on spending more, but at a slower rate of increase than in January.
Retail sales grew just 0.3 percent in February, compared to January’s surprising 4.9 percent, the U.S. commerce department reported.
Still, restaurant and retail sales combined to set a monthly record of $658.1 billion in February, according to the U.S. census bureau.
More money went to gasoline, less to optional purchases such as electronic gadgets and furniture. Gasoline prices rose 6.6 percent in February but sales rose only 5.3 percent, indicating that people cut back on driving as gas prices rose.
Online shopping decreased 3.7 percent, which analysts saw as a sign that people were returning to brick-and-mortar stores as the Omicron variant waned.
Spending on restaurants jumped 2.5 percent month-to-month, the largest monthly gain since May 2021. Gasoline sales rose 5.3 percent and vehicles and parts edged up 0.8 percent.
Excluding vehicles and their fuel, retail sales actually declined 0.4 percent in February, a sign that inflation is making shoppers more thrifty, the WSJ noted (see related story in this issue).
TRENDPOST: The sales figures are not adjusted for inflation. Therefore, a rise in sales’ dollar volume does not necessarily mean shoppers bought larger amounts. In fact, because of spiking inflation they spent more money but bought less products. So, increases in sales simply reflect the fact that everything costs more now (see “CONSUMERS SAY “NO THANKS” TO PRICIER ITEMS” in this issue).