Retail Sales Rebound as Economic Challenges Loom

U.S. retail sales saw a modest rebound in February, indicating continued economic growth, despite tariffs and federal worker firings affecting sentiment. The increase follows a January decline influenced by winter storms and wildfires. Economists predict a slowing consumer spending trend, with GDP growth forecasted at around 1.2% for the quarter.

In a sign that the U.S. economy is still growing, albeit at a moderate pace, retail sales rebounded in February following a notable decline in January, the Commerce Department reported. The rise comes amid ongoing concerns about the impact of tariffs and mass federal employee layoffs on economic sentiment.

Despite the February uptick, economists caution against optimism as consumer sentiment dipped significantly in March. Crucially, the recent downward revision of retail sales from January is linked to severe winter weather and Californian wildfires, suggesting that the current momentum may not be sustainable in the long term.

Evolving trade policies and the Trump administration's drastic public sector cuts have stirred fears over job stability and inflation, affecting consumer spending habits. Early data indicates a dip in discretionary spending in the Washington D.C. area. Persistent stock market volatility and climbing food prices pose further constraints, especially for lower-income families.

(With inputs from agencies.)