Car rebound drives US retail recovery, Middle East conflict boosts oil prices and adds to consumption worries.

Retail sales growth in the United States in February exceeded expectations, showing a broad-based growth trend, as consumers increased their spending after a sluggish start to the year. The purchase of automobiles rebounded, according to data released by the US Department of Commerce. Total retail purchases, not adjusted for inflation, increased by 0.6% month-on-month, compared to a slight decrease in January. Excluding automobiles and gasoline, retail sales increased by 0.4% month-on-month, marking the largest increase since August. Among the 13 retail categories, 10 experienced growth, including personal care, clothing, sporting goods, and hobby stores. Due to the impact of severe winter weather on demand, automobile sales increased by 1.2% month-on-month in February, marking the largest monthly increase since July of last year. The increase in gas station revenue mainly reflected the rise in gasoline prices, which accelerated further in March due to the Iran war. Retail data indicated that before the outbreak of the Iran war, consumer demand remained robust, benefiting from wage growth outpacing inflation and increased tax refunds. Analysis of internal credit card data by the Bank of America Research Institute showed that tax refunds helped support the discretionary spending of low-income consumers in February. However, the Middle East war has pushed gasoline prices above $4 per gallon, and if the conflict continues, it may lead to consumers adjusting their spending in other areas. As the only service industry category in the retail report, restaurants and bars rebounded by 0.4% in February after experiencing a decline the previous month. Retail sales data showed that the "control group" sales, which are used in calculating goods expenditure for the government's Gross Domestic Product, increased by 0.5% month-on-month, marking the largest monthly increase since October of last year. This indicator excludes food services, automobile dealerships, hardware stores, and gas stations. Meanwhile, ADP data released on Wednesday showed that after a similar growth in the previous month, US businesses added 62,000 jobs in March, indicating a stable labor market. The ADP employment data precedes the release of the US government's March employment report on Friday. Economists expect a rebound in nonfarm payrolls in March after recording one of the largest declines since the epidemic outbreak last month.