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Updated at 9:15 AM EDT
U.S. retail sales remained sluggish last month, data indicated Monday, amid a broader pullback in consumer spending and overall sentiment tied to the tariff and budget-cutting policies of President Donald Trump.
Headline sales rose 0.2% last month to a collective tally of $722.7 billion, the Commerce Department said, well south of Wall Street's consensus forecast of a 0.6% gain but a modest rebound from the downwardly revised January reading of negative 1.2%.
The closely tracked control-group number, which excludes autos, building materials, office supplies, gas-station sales and tobacco, and which feeds into the government's GDP calculations, rose 1% on the month, firmly ahead of the Wall Street consensus forecast of a 0.4% gain.
"Despite today’s mixed update, it’s reassuring to see positive retail sales data this month — something we didn’t experience in the prior report — and could give investors some cautious optimism that perhaps we might see a more resilient consumer in the coming months," said Bret Kenwell, U.S. investment analyst at eToro.
"If the consumer can hold up, there’s a good chance the economy can too," he added.
Stocks were little changed in the wake of the data release, with futures contracts tied to the S&P 500 suggesting a modest 4-point gain and those linked to the Dow Jones Industrial Average priced for a 60-point decline The tech-focused Nasdaq is called 55 points higher.
Benchmark 10-year Treasury not yields bumped 2 basis points higher to 4.308% while 2-year notes rose 4 basis points to 4.059%.
Last week, the University of Michigan's benchmark consumer sentiment index for March plunged to the lowest level in more than two years and unveiled one of the biggest jumps in longer-term inflation expectations since the early 1990s.
Related: U.S. jobs cuts at 16-year high as trade war concerns hammer sentiment
Earlier this month, Target Corp. (TGT) CEO Brian Cornell said tariffs on goods from Canada and Mexico would likely add price increases "within weeks." He forecast flat full-year same-store sales amid "more pronounced" economic uncertainty.
"Downside risks to the economic outlook have increased substantially over the last month," said Bill Adams, chief economist at Comerica Bank in Dallas.
"The klaxon of layoff headlines, a falling stock market, and tariff fears were a big blow to consumer confidence in early March," he added.
"The pullback in confidence is becoming a real threat to consumer spending, which as is often repeated accounts for two-thirds of U.S. economic activity."