(Reuters) – Retail sales in the United States brought less than expected in February over a month, 0.2%, which suggests that the American economy continued to grow in the first quarter, although a moderate pace, while feeling is affected by customs duties and massive layoffs of federal employees.

Economists interviewed by Reuters planned an average of 0.6% in February after a drop of 1.2% in January (revised).

The sharp decline in January must be understood in the context of the solid increases in the fourth quarter of 2024 and winter storms that struck many regions of the country in January, as well as forest fires in California.

However, with consumer morale came out at its lowest level in March for almost two and a half years, it is unlikely that this positive trend will continue.

The series of customs duties imposed by President Donald Trump on his main business partners arouses concerns about inflation and loss of jobs and income, which could weigh on consumer spending.

Massive layoffs of civil servants as part of an unprecedented campaign of the Trump administration are also considered to be harmful to consumer spending.

Excluding car, fuels, building materials and catering services, sales also rebounded by 1%, but more than expected, in February, against a drop of 1% in January (revised). The consensus tapped on an increase of 0.3%.

This category is the closest to the component of household consumption expenses entering into the calculation of the gross domestic product (GDP).

(Written by Lucia Mutikani; Mara Vîlcu and Diana Mandiá, edited by Kate Entringer and Augustin Turpin)

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