U.S. retail sales increased moderately in February as more expensive gasoline and food forced households to cut back spending on other goods like furniture, electronics and appliances, which could restrain economic growth this quarter, Reuters reported. The report from the Commerce Department, however, showed the rebound in sales in January was much stronger than initially estimated. Record gasoline and high food prices are hitting lower-income households the hardest. Overall, consumers are being cushioned by at least $2.5 trillion in excess savings accumulated during the COVID-19 pandemic. Worker shortages with a near-record 11.3 million job openings at the end of January are boosting wages and allowing some Americans to pick up extra shifts to augment their income. Retail sales increased 0.3% last month. Data for January was revised sharply higher to show sales surging 4.9% instead of 3.8% as previously reported. Economists had forecast retail sales growth slowing to 0.4%, with estimates ranging from as low as a 0.7% fall to as high as a 1.7% rise. Retail sales increased 17.6% from a year ago. Economists also viewed the pull back in monthly sales last month as pay back after January's surge, which was the largest gain in 10 months. Others saw the moderation as the beginning of a shift in spending back to services from goods amid a significant decline in coronavirus infections. The Federal Reserve on Wednesday raised its policy interest rate by 25 basis points, the first hike in more than three years, to quell inflation.
