US shoppers increased their spending slightly in February, following a significant decline in January, indicating a cautious approach as economic concerns grow.
According to the Commerce Department, retail sales rose by just 0.2% last month, a modest recovery from the sharp 1.2% drop recorded in January. While spending increased at grocery stores, home and garden outlets and online retailers, sales fell at auto dealerships, restaurants and electronics stores.
The tepid increase in retail activity suggests that consumers are growing more wary as economic uncertainty looms. Stock market volatility, tariff threats and concerns over government spending cuts under President Donald Trump have contributed to a sense of caution among shoppers.
Adding to the concern, consumer sentiment dropped for the third consecutive month, with the University of Michigan’s survey showing a 20% decline since December. Many respondents cited policy uncertainty as a key factor in their growing pessimism. While confidence in the current economy remained stronger among Republicans, their outlook for the future dipped by 10%.
With consumer spending accounting for nearly 70% of the US economy, this cautious behavior could signal broader economic challenges in the months ahead.
(With inputs from agencies)