Retail sales rebounded in February after a surprising decline in January, with sales rising by 0.6%. This increase was slightly below economists’ expectations of a 0.8% rise, but a positive sign nonetheless.
The unexpected 1.1% decrease in retail sales in January had raised concerns about consumer spending growth, but the rebound in February has alleviated some of these worries. However, economists still believe that consumer spending has slowed in the early months of 2024.
Certain categories saw gains in sales in February, including building materials, garden equipment, and motor vehicles. On the other hand, furniture and home furniture stores experienced a decline in sales during the month.
Despite these fluctuations in retail sales, the overall economy has remained strong at the beginning of 2024. Projections for economic growth in the first quarter have increased, showing a positive outlook for the months ahead.
Inflation has been higher than expected, leading economists to believe that the Federal Reserve can afford to wait longer before cutting interest rates. Morgan Stanley predicts that the Fed will likely cut rates in June once inflation starts moving towards the 2% target.
Overall, the latest data on retail sales and the economy show a mixed but stable picture for the start of 2024. With continued monitoring of consumer spending and inflation, economists will be watching closely for any further changes in the coming months.
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