Strong Labor Market Spurs Retail Sales Growth

WASHINGTON D.C. — According to the National Retail Federation (NRF), though overall retail sales dipped slightly in February, core spending rose.

"February's retail sales growth is not surprising given the strong growth we saw last month, continuing to reflect consumers' ability and willingness to spend thoughtfully on household priorities," NRF President and CEO Matthew Shay said. "While recent volatility in banking and financial markets is adding to economic uncertainty, the underlying fundamentals in the consumer economy remain on solid footing as jobs and wages are growing and inflation is trending down."

U.S. Census Bureau data showed overall retail sales in February were down 0.4 percent from January but up 5.4 percent year over year. In January, sales were up 3.2 percent month over month and 7.7 percent year over year.

NRF's calculation of core retail sales — excluding automobile dealers, gasoline stations and restaurants — showed February was up 0.5 percent from January and up 6.5 percent unadjusted year over year. In January, sales were up 2 percent month over month and 6.9 percent year over year. 

February sales were up in all but one retail category on a yearly basis and increased in five out of nine categories on a monthly basis. Specifics from some key sectors include:

• General merchandise stores were up 0.5 percent month over month seasonally adjusted and up 10.7 percent unadjusted year over year.
• Online and other non-store sales were up 1.6 percent month over month seasonally adjusted and up 8.5 percent unadjusted year over year.
• Health and personal care stores were up 0.9 percent month over month seasonally adjusted and up 8 percent unadjusted year over year.
• Grocery and beverage stores were up 0.5 percent month over month seasonally adjusted and up 5.5 percent unadjusted year over year.

The NRF will release its full 2023 retail sales forecast as part of its State of Retail and the Consumer event on March 29.

Washington, D.C.-based NRF is the world's largest retail trade association.