Retail Sales Rebound in February but Miss Expectations as High Inflation and Rising Rates Cast Doubt on Consumer Spending

• Retail sales rebounded in February after declining in January, but the increase was lower than expected, suggesting consumers may be growing more cautious • Inflation remains high, over 3%, while interest rates continue rising, squeezing consumer budgets • Spending rose in most categories, especially autos, gas, and restaurants, but fell for furniture, clothing, health/personal care, and online retail
• Strong job market and rising wages have buoyed spending so far, but higher loan payments and credit card debt may dampen spending going forward • Economists predict consumers will pull back spending further as interest rates and prices continue climbing while making tradeoffs in budget priorities