Retail sales were up in February, but Middle East war may drag them down

For the past few months, retail sales numbers from the Census Bureau have been either flat or slightly down. But the latest update provides at least a little hope that the consumer is still willing to spend: Sales rose 0.6% from the previous month.

But that figure — like many we’ve gotten recently — is for February, before the U.S. and Israel launched a war in the Middle East. So is the data still meaningful?

Any increase is fairly good news, said Lauren Saidel-Baker, an economist at ITR Economics.

“Now, I will warn, part of that increase came on higher pricing. So inflation is one component of this. But even if we are to deflate that number, we're seeing real growth,” she said.

Saidel-Baker said that means, at least in February, people were out in the economy spending more on goods and services.

Still, she warned not to read too much into any single month.

“I'm going to get ‘one month of data does not make a trend,’ like, tattooed across my forehead, because that really is true,” she said. Monthly data can be exciting to pick apart, “but we really want to take a step back and look at the general trajectory of the consumer.”

That trajectory is looking relatively good, said Mark Mathews, chief economist at the National Retail Federation.

“Consumers are willing to get out there and spend despite their their weak sentiment about the economy and where the country might be headed,” he said.

Mathews said the sales data and projected Easter spending show consumers continue to be the “shining star” of the economy.

“If we are spending our sentiment, the economy would be in a lot more trouble. If we look at, you know, 2025 … almost all the GDP growth came from consumer expenditures,” he said.

The data show that despite some rough winter weather that might’ve slowed traffic at grocery stores, consumers still went out and spent, explained Katherine Black at Kearney.

“They're being more social than ever, and they're prioritizing that, and they're spending money when they do it,” she said.

And even if February was a bright spot?

“With March and the level of uncertainty, I don't know that it's a sustained bright spot. We'll have to wait and see,” Black said.

Take the war in Iran, for example. While consumers are feeling the effects immediately in gas prices, they might not see other impacts until the second quarter and beyond, according to Rick Miller at Big Chalk Analytics.

“If you think about the effect on packaging products for food, if you think about the impact on fertilizer … that's not going to affect food prices until later in the year,” he said.

For now, Miller said, the companies he works with are continuing to focus on pricing and promotions and convincing consumers it’s still worth spending with them.

Correction (April. 2, 2026): A previous version of this story misstated the division of Kearney where Katherine Black works.