Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Retail Trade Sales, March 16, 2022

Despite recent geopolitical events, the omicron variant, declining consumer confidence and increasing inflation, U.S. advance estimates of retail and food service sales for February 2022 rose. Retail sales recorded a seasonally adjusted total of $658.1 billion in February, an increase of 0.3% from January 2022, although sales increased at a slower pace than January's 4.9% month-over-month increase as rising inflation and ongoing supply chain obstacles slowed sales. On a year-over-year basis, February 2022 retail sales increased 17.6% above the same period a year ago.

Despite the significant challenges posed by ongoing supply chain issues, inflation and geopolitical events, consumers continue to display their resiliency and willingness to spend as they continue to propel the economy forward. Retailers remained committed to providing their customers with the experience and products they demand as retailers continue the massive transition from just-in-time inventory to having backup inventory and substitute supply sources. 

While February 2022 retail sales illustrate the continuance of a strong labor market where wages are being pushed up and, as a result, provide consumers with increasing household wealth and more spending power, it is without a doubt that high levels of inflation are taking a toll on consumer pocketbooks and thus likely curbing spending amidst higher consumer prices. While consumers are reasonably well equipped to continue spending, the conflict in Ukraine could moderate spending moving forward.

On a year-over-year basis, all retail categories were up and increasing most in gasoline stations (36.3%) and food services and drinking places (33.0%). On a month-over-month basis, retail sales declined in 7 of 13 retail categories where the largest declines were in non-store retailers and health and personal care stores at -3.6% and -1.7% respectively.