Retail sales in the U.S. increased modestly in February, according to data released by the U.S. Census Bureau. The report showed a 0.2% seasonally adjusted month-over-month rise and a 3.1% unadjusted year-over-year increase. This followed a 1.2% month-over-month decline in January and a 3.9% year-over-year increase. The National Retail Federation (NRF) attributes this to consumer worries over inflation and Washington policy decisions.

“Lower-than-expected consumer spending in the first couple of months of the year likely reflected payback for very strong spending in the fourth quarter and weather-related events since then,” says NRF chief economist Jack Kleinhenz. “Moreover, these results show that households are apprehensive and carefully navigating lingering inflation and turmoil related to changing economic policies.”

“Regardless of the softer spending, consumer fundamentals remain healthy and intact so far, supported by low unemployment, steady income growth, and other household finances,” Kleinhenz says. “American shoppers will likely continue to spend as long as unemployment remains low and job growth continues.”

The NRF’s measure of core retail sales—which excludes auto sales, gas stations, and restaurants—rose 0.9% month over month but declined 0.2% unadjusted year over year due to strong sales in February 2024. On a three-month moving average, core retail sales were down 1.2% year over year.

Separate data from the CNBC/NRF Retail Monitor, powered by Affinity Solutions, showed a 0.22% month-over-month decline in core retail sales in February but a 4.11% year-over-year increase. In January, the monitor reported a 1.27% month-over-month decline and a 5.72% year-over-year increase. Despite the recent fluctuations, retail spending showed resilience during the 2024 holiday season, with core retail sales growing 4.2% year over year.