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.

Control Group: A Solid Read for GDP Trackers

The control group — which excludes motor vehicles, gasoline, building materials, and food services — is the measure that feeds most directly into the Bureau of Economic Analysis's personal consumption expenditure estimates. In February, the control group rose 0.4 percent month-over-month and was up 4.1 percent from a year ago. This is a constructive signal for first-quarter GDP consumption forecasts, suggesting 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 control group sustains its 0.4 percent monthly gain or reverts toward the flat readings seen in late 2025. A second consecutive positive control group print would meaningfully strengthen first-quarter GDP consumption estimates.