NEW YORK (AP) — Shoppers increased their spending in February after pulling back at the start of the year, reflecting volatile and cautious activity by American consumers even before the Iran war sent gasoline prices soaring.
Retail sales rose a better-than-expected 0.6% in February, after registering a 0.1% decline in January, the Commerce Department said Wednesday. There is a concern that Americans, already squeezed by years of elevated inflation,
will cut spending further.
Gas sped past an average of $4 a gallon on Tuesday for the first time since 2022 and jumped another 4 cents overnight.
The national average for a gallon of regular gasoline hit $4.06 Wednesday. That was a dollar more per gallon before the war.
Business at clothing and accessories stores rose 2%, while business at electronics and appliance stores rose 0.5%. Online sales rose 0.7%
The snapshot offers only a partial look at consumer spending and doesn’t include things like travel and hotel stays. But the lone services category – restaurants – registered an increase of 0.4%.
The Iran war began Feb. 28 and has shut down the Strait of Hormuz, cutting off one-fifth of the world’s oil supply. The price for a barrel of Brent crude, the international standard, is up more than 45% since the start of the war. The cost of diesel fuel has risen faster than gasoline, driving up the cost of transportation for companies. Economists expect a related bump in inflation, potentially as soon as this month.
