Consumers are spending less. What that means for the global economy.

Subscribe to enjoy similar stories. The consumer spending boom is fading, and that could spell trouble for the global economy. The latest retail sales report missed the mark on Monday.

Sales rose by 0.2% in February from January, below consensus forecasts for a 0.7% increase. Stores selling discretionary products had a rough month as consumers prioritized spending on essentials. The report provides a second month of hard economic data that backs up what soft data—such as consumer sentiment—have been pointing at for weeks now.

Consumers are curbing their spending in response to growing caution about the economy. Uncertainty around inflation, federal layoffs, volatility in the stock market, and the Trump administration’s economic policies, particularly tariffs, have clouded the outlook of many Americans. Indeed, consumer sentiment has dropped for the past three months, sliding as much as 11% in the first weeks of March from February.

And although sentiment and spending haven’t correlated closely in the past five years, they are now bridging the gap. “While consumer health remains good, Fitch is watching the recent news flow around tariffs, inflation and equity market volatility and its impact on consumer sentiment, particularly in discretionary categories," said David Silverman, senior director at Fitch Ratings. “Fitch expects sluggish spending on these segments to continue through 2025 as consumers remain choiceful and value-focused." That will weigh on the broader economy this year.