February retail sales increased 13 percent year over year, and while inflation did contribute somewhat to the increase, sales generally were strong across all retail segments as consumers continue to spend.
Headwinds persist, however; consumer sentiment reached its worst level since May 1980, falling to 59.7. Rising inflation, increasing fuel prices, and uneasiness over geopolitical issues have consumers cautious about the immediate future.
Even with retail sales continuing to increase, we believe that, below the surface, a bifurcation in consumer spending is impacting low- to mid-income consumers the hardest, which will be seen in sales and earnings results in coming months.
Download the March retail and consumer summary.
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