Continued increases in inflation and other concerns about prices potentially rising further due to the global effect of Russia's invasion of Ukraine both likely contributed to the comparatively slow rate of some measures of economic growth that took place in February.
New U.S. Commerce Department data for the month of February shows just a 0.3 percent increase in retail spending compared to the 4.9 percent uptick that was reported in January—while some Americans shifted their spending habits to mirror loosening COVID restrictions as restaurant sales rose by about 2.5 percent.
The January and February metrics of consumer spending were significant jumps from the same period in 2021 showing overall recovery from the pandemic's effect on the economy. However, recent months have seen growth slow as inflation has persisted.
The largest increase from January to February was reported in spending at gas stations with over 5 percent, revealing the early impacts that record-high gas prices have had on consumer spending.
On Tuesday, the Labor Department reported that consumer prices had risen just under 8 percent from last February to this year, which used price changes prior to February 15, so it does not yet provide a full accounting for the impact of rising gas and energy prices.
Spending decreased in February at several categories of stores including furniture (1 percent), electronics (0.6 percent), grocery (0.5 percent), and other general health (1.8 percent) stores, the new data shows.
Meanwhile, spending at car parts stores (0.8 percent), home improvement and gardening supply (0.9 percent) stores, clothes (1.1 percent), sporting goods (1.7 percent), and other "miscellaneous" stores (1.9 percent) rose.
Experts have said prices could continue to increase as hundreds of companies have pulled business out of Russia in protest of the country's invasion of Ukraine since the war began late last month.
Meanwhile, rising COVID cases in several areas across China have also reignited fears of supply chain shortages and subsequent price increases of various materials, according to The Associated Press.
The Federal Reserve is also set to begin several previously announced measures Wednesday to slow inflation while also trying not to raise borrowing costs so high that it shocks the larger economy into a recession, the AP reported.
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The Fed is expected to begin that process by raising borrowing rates for the first of several times this year. It is still being discussed when and by how much the Fed should decrease its $9 trillion in bond holdings, finally beginning the process of reversing several measures that were undertaken to assist the economy when the COVID recession hit.
