U.S. Retail Sales Rise 0.6% in February, Up 3.7% Year-Over-Year

U.S. retail and food services sales rebounded in February 2026, rising 0.6 percent to $738.4 billion — a solid recovery from the revised 0.1 percent slip in January. On a year-over-year basis, sales were up 3.7 percent from February 2025, suggesting that consumer spending momentum remains intact heading into spring. The January figure was itself revised slightly upward, from a previously reported decline of 0.2 percent to a more modest 0.1 percent dip, a minor but directionally positive adjustment.

Headline vs. Core: Autos Amplified the Bounce

• Stripping out motor vehicles and parts, retail sales rose a more modest 0.5 percent in February — still positive, but confirming that auto dealers provided a meaningful lift to the headline.
• Motor vehicle and parts dealers posted a 1.2 percent monthly gain and were up 4.0 percent year-over-year, reflecting continued demand for new vehicles.
• Gasoline stations added 0.9 percent on the month, though their year-over-year comparison was negative at -0.7 percent, reflecting the price-driven nature of that category rather than any volume surge.

The ex-auto, ex-gas measure — which excludes both volatile categories — rose 0.4 percent in February and was up 4.1 percent year-over-year, broadly consistent with the headline picture.

Beneath the Headline: Underlying Spending Held Up

The ex-auto, ex-gas measure's 0.4 percent monthly gain and 4.1 percent annual gain suggest that underlying consumer spending held up even as the headline was partly flattered by auto and gas activity.

Category Standouts: E-Commerce, Apparel, and Restaurants

Several categories posted outsized moves in February:

• Nonstore retailers (primarily e-commerce): rose 0.7 percent month-over-month and 7.5 percent year-over-year, extending a persistent structural shift toward online purchasing. At $132.8 billion, this category has more than doubled since 2020 and now rivals general merchandise stores in scale.
• Clothing and clothing accessories stores: gained 2.0 percent on the month and 7.2 percent year-over-year — one of the strongest category performances in the release, likely reflecting a seasonal uptick in spring apparel purchasing.
• Sporting goods, hobby, musical instrument, and book stores: jumped 1.3 percent month-over-month and 11.3 percent year-over-year, the largest annual gain among major categories.
• Miscellaneous store retailers: rose 1.1 percent on the month and 10.2 percent year-over-year.
• Food services and drinking places: edged up 0.4 percent in February and were up 5.2 percent from a year ago. Restaurant spending is widely watched as a discretionary barometer — its continued year-over-year strength suggests consumers are still willing to spend on experiences, not just necessities.
• Furniture and home furnishings stores: fell 1.0 percent on the month and were down 5.6 percent year-over-year, the weakest category in the release and a potential signal of housing-market softness weighing on big-ticket home goods.
• Department stores: declined 7.8 percent year-over-year, continuing a secular contraction as consumers migrate toward warehouse clubs, supercenters, and e-commerce.
• General merchandise stores: essentially flat on the month, down a marginal 0.0 percent, and up only 1.2 percent year-over-year — the most subdued annual gain in the broader retail complex.

Real vs. Nominal: Inflation's Quiet Role

Retail sales are reported in nominal dollars and are not adjusted for price changes. With consumer prices still running above the Federal Reserve's 2 percent target, some portion of the 3.7 percent year-over-year nominal gain reflects higher prices rather than greater purchasing volume. The gap between nominal sales growth and real consumer spending growth is a persistent feature of this environment — households are spending more dollars, but not necessarily buying proportionally more goods. Gasoline station sales illustrate this dynamic clearly: the 0.9 percent monthly gain likely reflects price movements rather than a meaningful increase in fuel consumption, and the category is still down 0.7 percent year-over-year.

Consumer Health Signal: Momentum Intact, but Uneven

February's print offers a broadly reassuring picture of the U.S. consumer. The 0.6 percent headline rebound after January's soft patch, combined with a 3.7 percent year-over-year gain, is consistent with an economy where wage growth is still outpacing headline inflation for most workers. The strength in discretionary categories — restaurants, apparel, sporting goods — suggests households are not yet in a defensive spending posture. The weakness in furniture and department stores, however, points to pockets of demand softness, particularly in categories tied to housing or legacy retail formats.

The three-month cumulative picture reinforces the constructive tone: total retail sales for December 2025 through February 2026 were up 3.1 percent from the same period a year earlier, a pace that, while not exceptional, is consistent with a consumer sector that is growing in nominal terms.

The next scheduled release — the March 2026 Advance Monthly Retail report on April 21, 2026 — will be the first read on whether February's rebound was the start of a sustained re-acceleration or a one-month bounce. The key number to watch will be whether the ex-auto, ex-gas measure sustains its 0.4 percent monthly gain. A second consecutive positive print would strengthen the case that underlying consumer spending is firming.