Solid retail sales after slowdown due to bad weather

April 1, 2026

February retail sales increased 0.6%, slightly above expectations for a 0.5% rise. Excluding autos, retail sales advanced by a solid 0.5%, surpassing the consensus estimate of 0.3%. Early tax refunds and a return to more seasonable weather encouraged shoppers to open their wallets. 

Sales at motor vehicles and parts dealers rose 1.2% after plunging 1.7% in January. Light vehicle sales clocked in at a firm 15.8 million unit annualized selling pace, up from 14.9 million in January. Automotive purchases at the start of the year were depressed by harsh wintry weather, keeping consumers from venturing outdoors. Sales at restaurants and bars picked up to show a 0.4% gain after declining 0.2% for the same reason.

A number of key categories booked increases in February. Sales at health and personal care stores rose 2.3%, apparel retailers increased 2%, sporting goods stores up 1.3%, electronics gained 0.5%. E-commerce sales increased 0.7% after rising 1.4% in January. 

Gasoline station sales increased 0.9%, boosted by higher prices at the pump as gasoline prices rose 0.8%. However, March gasoline prices, up 20% by one measure and even more by others, are likely to have sapped consumer purchasing power over the last several weeks.

Core retail sales (which exclude autos, gasoline, restaurants and building materials and feed into the GDP consumer spending calculation) advanced 0.5% after rising 0.2%. These figures are consistent with our estimate for 2% annualized growth for both consumer spending and GDP in the first quarter. Clearly, there is downside risk to the growth projections given the surge in energy prices.