Retail sales jumped 0.6% in February

The Commerce Department reported that Americans increased their retail spending by 0.6% in February, snapping a three-month streak of declines.

The rebound exceeded economists’ expectations. Spending gains were led by department stores at 3%, personal care shops at 2.3%, and clothing retailers at 2%, while grocery and furniture stores both saw a 1% decline.

Strong consumer spending suggests that a stable labor market and low layoff rates are currently sustaining economic activity.

However, the economic outlook is clouded by the ongoing US-Israel conflict with Iran, which started on February 28. The geopolitical strain is already weighing on the public, with closures at the Strait of Hormuz surging oil prices and pushing domestic gasoline above $4 per gallon.

Higher gas prices have already increased the price of transport, deliveries, air travel, and more.