Americans increased spending tepidly last month as anxiety over the economy takes hold

News

Americans increased spending tepidly last month as anxiety over the economy takes hold

2025-03-18 02:22 Last Updated At：02:30

WASHINGTON (AP) — U.S. shoppers stepped up their spending just a bit in February after a sharp pullback the previous month, signaling that Americans are shopping more cautiously as concerns about the direction of the economy mount.

Retail sales rose just 0.2% in February, a small rebound after a sharp drop of 1.2% in January, the Commerce Department said Monday. Sales rose at grocery stores, home and garden stores, and online retailers. Sales fell at auto dealers, restaurants, and electronics stores.

The small increase suggests Americans may be growing more wary about spending as the stock market has plunged and President Donald Trump's tariff threats and government spending cuts have led to widespread uncertainty among consumers and businesses.

Some economists were relieved the numbers weren’t worse. Still, many expect consumer spending will grow just 1% to 1.5% at an annual rate in the first three months of this year, far below the 4.2% gain in the final quarter last year.

“Consumer spending is on track to slow sharply this quarter, but not by as much as we previously feared,” Stephen Brown, an economist at Capital Economics, a consulting firm, said in an email.

On Friday, a measure of consumer sentiment fell sharply for the third straight month and is now down more than 20% since December. Respondents to the University of Michigan's survey cited policy uncertainty as a leading reason for the gloomier outlook. While the respondents were divided sharply by party — sentiment about the current economy fell among Republican by much less than for Democrats — Republicans' confidence in the economy's future dropped 10%.

Consumers from all income levels are feeling more strained.

Hunter Simmons of Austin, Texas, who is a lawyer and journalist, said that the uncertainty around the economy because of the stock market turmoil and tariffs has made him more cautious about spending. He said he used to buy the more expensive farm fresh eggs, but now he’s going for the cheapest eggs he can find. He’s also been buying fewer fresh vegetables and fruits and has turned to frozen versions. And lately Simmons started to pay for gas in cash and is joining fuel rewards programs.

“I am not a big spender in general, but I have been cutting back in small ways,” he said.

A slew of earnings reports over the past few weeks from major retailers including Walmart, Macy’s and Dollar General have cited a slowdown in spending.

Walmart, the nation’s largest retailer and a bellwether for the retail sector, released a weak outlook last month citing uncertainty around tariffs.

February sales also fell last month at gas stations, clothing stores, and sporting goods stores. The figures aren't adjusted for prices, and the cost of gas also declined in February, which likely accounts for most of the drop. Excluding gas and autos, retail sales rose 0.5%, a healthier figure but still modest after a plunge of 0.8% in January.

Also Monday, the National Association of Homebuilders said its index measuring builder sentiment fell three points to 39, the lowest level in seven months, as economic uncertainty dimmed builders' outlook and fewer potential buyers visited homes.

“Economic uncertainty, the threat of tariffs and elevated construction costs pushed builder sentiment down in March,” the group said. The homebuilders estimate tariffs will add $9,200 to the cost of a new home.

Macy’s says its customers, even at its upscale chains Bluemercury and Bloomingdale’s, are feeling angst and its financial outlook this month reflects that.

“I think the affluent customer that’s shopping Macy’s is just as uncertain and as confused and concerned by what’s transpiring,” Macy’s CEO Tony Spring said at the time.

Hiring has mostly held up and there are no signs that companies are laying off workers. As long as Americans have jobs, spending could remain resilient. But that is not assured.

Dollar General CEO Todd Vasos said Thursday that the overall economic picture for his customers is not ideal and the company said it would close around 100 stores.

“Our customers continue to report that their financial situation has worsened over the last year as they have been negatively impacted by ongoing inflation ” Vasos said during an earnings call. “Many of our customers report that they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities.”

Spending patterns at Costco have changed to accommodate a soured view of the economy, including a shift toward ground beef and poultry instead of more expensive cuts of meat, said to Gary Millership, the company’s chief financial officer.

American Eagle Outfitters CEO Jay Schottenstein said angst is particularly high among younger customers.

“Not just tariffs, not just inflation," said Schottenstein. "We see the government cutting people off. They don’t know how that’s going to affect them. And when people don’t know what they don’t know – they get very conservative.”

The retail sales report mostly just covers goods purchases — as well as restaurant sales — but there are signs Americans are cutting back spending on services as well.

Airline executives at JP Morgan's airline industry conference last week said bookings have fallen.

“There was something going on with economic sentiment, something going on with consumer confidence," said Delta CEO Ed Bastian at the industry conference.

D'Innocenzio reported from New York.

Texas wildfire prompts evacuations as Arkansas and Florida also battle blazes

2025-03-21 04:32 Last Updated At：04:40

AUSTIN, Texas (AP) — Wildfires fueled by dry conditions and gusting winds burned in a few Southern states Thursday, forcing evacuations in Texas and prompting Florida officials to close part of a major highway with spring break in high gear.

A wildfire in Sam Houston National Forest near Houston prompted the evacuation of about 900 homes and closed schools. The National Weather Service issued elevated fire warnings around the nation’s fourth-largest city.

The fire, which started Wednesday, had burned about 3.7 square miles (9.6 square kilometers) and was only about 20% contained Thursday afternoon as firefighters used water-carrying helicopters to douse hot spots and bulldozers to dig containment lines, the Texas A&M Forest Service said.

There were no immediate reports of injuries or property damage, but the Cleveland Independent School District, which has about 12,000 students, canceled classes as a precaution.

Firefighters and law enforcement “did an such unbelievable job yesterday in protecting homes, animals, livestock and people. We’ve lost basically nothing, which is hard to believe,” the county’s top elected official, Montgomery County Judge Mark Keough, said.

However, he said, expected wind gusts Thursday along with a drop in humidity could make the situation disastrous.

"We’re asking the people who evacuated last night to stay still away from their homes,” Keough said.

In the Florida Keys, a large brush fire that began Tuesday caused authorities to close the two roads leading in and out of the island chain, because of smoky conditions and to allow firefighters to move equipment.

Officials said the fire had burned about 34 square miles (88 square kilometers) and was about 20% contained.

Spring break is in full swing in Florida, and officials said U.S. 1, the major thoroughfare that connects the mainland to the islands, was expected to have intermittent closures in the coming days. It is also a heavily traveled road for people who live on the mainland and work at many of the hotels and restaurants in Key Largo and beyond.

In Arkansas, crews responded to nearly than 100 fires Wednesday that were fueled by high winds and were dealing with five new ones Thursday.

The fires closed several highways, including a portion of Interstate 530 southeast of Little Rock due to heavy smoke.

Flames damaged structures in several cities, including Little Rock. The roof collapsed at St. Joseph’s, a 115-year-old building in North Little Rock that once served as an orphanage and is now the home of a nonprofit that provides urban farming resources.

The South has experienced recent cold and dry conditions, followed by gusting winds, that have fanned the flames.

Texas has seen fire hazards range from the far northern Panhandle, where ground vegetation froze and dried out, and push hundreds of miles east to the coast.

South Florida has seen every little rainfall over the past few weeks. The rainy season doesn't start until sometime around mid-May. Another cold front with dry air is expected to push through South Florida on Thursday night, said meteorologist Donal Harrigan with the National Weather Service in Miami.

The weather service issued Red Flag warnings for fire conditions in east Texas and South Florida and could extend them for several days.

Red flag warnings are issued by the National Weather Service when conditions are ripe for fires. In southeast Texas, weather service officials predicted wind gusts of 25 miles per hour (40 kilometers per hour), combined with humidity as low as 18%. That combination will continue to dry out vegetation.

Frisaro reported from Fort Lauderdale, Florida, and DeMillo reported from Little Rock, Arkansas.