US retail sales recovered more strongly than expected in February, rising 0.6% from the previous month to reach $738.4 billion. This was higher than market expectations of a 0.5% increase and marked a clear improvement from January's revised decline of 0.2%.

Compared to the same time last year, retail sales were up 3.7%, indicating that consumer spending remains steady despite high interest rates and ongoing inflation concerns. The growth was seen across several sectors, with strong performance in online shopping, restaurants and bars, clothing stores, and automobile sales.

The increase in spending suggests that consumers are still willing to spend on both essential and non-essential items. This resilience is being supported by a strong job market and relatively stable household incomes.

The better-than-expected data could make it more challenging for the Federal Reserve to consider cutting interest rates in the near term, as steady consumer demand may keep inflation pressures elevated.

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