Retail sales show slight increase despite economic uncertainties
- U.S. retail sales increased by 0.2% in February 2025, which is better than the revised 1.2% decline in January.
- The OECD has lowered its economic growth forecast for the U.S. to 2.2% for 2025 from 2.4%, amidst concerns over tariffs.
- Despite uncertainties related to trade policies, U.S. markets experienced consecutive gains, suggesting some resilience among investors.
In the United States, retail sales experienced a modest increase of 0.2% in February 2025, marking a rebound from a significant drop of 1.2% in January. This data was released by the Commerce Department, which noted that the figures missed the Dow Jones estimate of a 0.6% rise. The revision from January's estimated decline of 0.9% reflects a more severe drop than initially thought, highlighting the challenges U.S. consumers faced amid political and economic pressures. The economic landscape is further complicated by U.S. President Donald Trump's tariffs, which are impacting imported goods and may eventually be passed on to consumers in the form of higher prices. The Organisation for Economic Co-operation and Development (OECD) recently revised its forecast for U.S. GDP growth down to 2.2% for 2025 from a previous estimate of 2.4%, indicating a slowing economy. Analysts express concern that with uncertainty surrounding the trade policies, particularly upcoming tariff announcements, market forecasts might be adjusted downward if clarity does not emerge soon. Despite these challenges, U.S. stock markets showed signs of recovery, posting their second consecutive winning day. The European Stoxx 600 index also had a positive session, indicating a broader sense of resilience in the global market. However, the ongoing trade disputes and tariffs could pose risks that may dampen consumer spending and overall economic growth. The sentiment remains cautious among market strategists who emphasize the need for clear and strategic policy directions from the administration. Oil prices saw an uptick on the same day, as President Trump linked recent attacks by the Yemeni militant group Houthis to Iran, fueling concerns over geopolitical tensions. Such developments could have implications for global markets, further intertwining economic, political, and social factors influencing both stock performance and retail sales. With the landscape evolving, U.S. consumers' spending behaviors stand as a key indicator to watch in the coming months, and analysts continue to monitor how external factors such as tariffs and global events shape the economic outlook.