The latest advance monthly retail sales report will be released on Wednesday morning by the U.S. Department of Commerce. Economists surveyed by Bloomberg estimate a 0.5% increase in retail sales for the month of February, an optimistic jump from the 0.2% dip from the previous month.
However, the upcoming report will not reflect the impact of the U.S. attacking Iran on Feb. 28, which spiked oil prices and sunk major stock indexes. “February is the eye of the hurricane,” said economist Andrew Zatlin of SouthBay Research. “We just got through one economic shock, the government shutdown, and now we’re in another one.”
Here are five things to look out for on Monday’s report.
1. Discretionary spending
While many consumers stayed home because of the harsh winter weather, February likely saw an increase in categories like e-commerce and some retail segments. Economists will also be tracking hobby-related industries like sporting goods, as well as electronics and online retailers to track discretionary spending. “Weather was really a non-issue because it was so poor in January that we’re going to have a snap back in the month of February,” said Stan Shipley, economist at Evercore ISI.
2. Home and auto spending will stay low
Some sectors, like clothing, are more likely to show recovery from delayed purchases. Others have likely not improved over one month. Motor vehicles and parts sales fell 0.9% in January, largely due to cold weather and may continue to remain constrained as lower-income consumers struggle with high prices and interest rates. Home related spending, like construction and furniture, are still under pressure as 30-year fixed mortgage rates hover over 6%, a significant increase from the lows around 3% during the COVID-19 Pandemic.
3. Tax refunds and wage gains
Tax refunds likely boosted confidence, and many states implemented wage hikes at the start of the year, boosting income especially for hourly workers. For many, those income gains only began to show up in paychecks by mid- to late January, making February the first full month of impact. Tax refunds on average are 10.9% higher than in 2025, according to the latest IRS filing data, largely based on tax cuts from President Donald Trump’s “One Big Beautiful Bill Act.”
“People are seeing more money in their pockets,” Zatlin said. “Not huge, but Americans will spend what they have.”
4. Uneven Recovery
Consumer spending contributes to 70% of the economy. In February, Americans earning $275,000 or more accounted for nearly 50% of all consumer spending, while lower- and middle income spending remained flat. Spending patterns continue to reflect a “K-shaped” economy. Higher-income households are driving much of the growth, supported by stock market gains before the War in Iran started. Lower-income consumers are more constrained and less likely to take advantage of stock market gains.
5. Consumer Confidence
Consumers spend based on what they earn, but also on what they expect to earn. Zatlin said a stronger-than-expected reading, particularly above the 0.5% consensus, could indicate that households are willing to spend beyond current income, signaling optimism about future economic conditions.
A weaker number below 0.5% may suggest continued caution. Consumer confidence rose to 56.6% in February, which is higher than in November and December of the previous year, according to the University of Michigan. However, confidence fell in March shortly after the war started, meaning February’s numbers may say less about where the economy is going than where it briefly was.
