Sales of autos and auto parts were up 0.8% and sales at gasoline stations rose 5.3%.

The booming labor market, which produced nearly 1.2 million jobs in the first two months of the year while boosting wages, has propped up consumers’ spending power, economists say. Likewise, many households are still sitting on a pile of savings thanks to government stimulus programs that have allowed them to absorb higher prices for now.

The Federal Reserve estimates that in the fourth quarter of last year households had about 36% more liquid assets, such as bank deposits, than they did in the fourth quarter of 2019.

February also saw a pickup in business activity as the surge in Covid-19 cases driven by the Omicron variant has eased. Retailers and restaurants likely saw a boost in business as people grew more willing to leave their homes, economists said.

Holding consumers back was the recent burst of price increases, led by gasoline. Inflation rose 7.9% in February from the previous year, the fastest pace in 40 years, according to the Labor Department. Gasoline prices were up 38% on the year, the department said.

February saw a slowdown in auto sales. Americans bought cars and trucks at an annualized pace of 14.5 million in February, according to the Commerce Department, down from 15.5 million in January, as dealers continued to struggle with inventories.

As fears of the Omicron variant faded, customers at The Last Word, a pair of independent bookstores in Maryland, were more willing to linger, said owner

Erin Matthews.

“It’s more of: ‘I’m going to take this rainy Sunday and go and spend a couple of hours in the bookstore, and just browse to my heart’s content and buy a few things,’” she said.

Ms. Matthews has herself become more willing to venture out now that Covid-19 vaccination rates have risen and cases are falling.

“This time last year I would never have eaten inside, but now I’ll go and have a sit-down meal in a restaurant,” she said.

Americans have so far appeared willing to absorb higher prices.

The National Retail Federation in a report Tuesday forecast that annual retail sales would rise between 6% and 8% in 2022, down from 14% in 2021 but still well above pre-pandemic levels.

“All the excess savings you had built up during the pandemic…should cushion the blow from things like higher gasoline prices, which obviously will have a direct impact on spending,” said

Kevin Cummins,

chief U.S. economist at

NatWest.

Stephen Stanley,

chief economist at Amherst Pierpont Securities, said he expects the hit from higher gasoline prices to be relatively short-lived. On Tuesday, benchmark oil prices fell below $100 for the first time since late February.

“The big fundamental going forward, once we hopefully get past the war and the gasoline-price spike and all of that, is that the economy seems to be fully reopening as we head into the spring,” he said.

What happens with inflation in the coming months will be crucial, however. For now, many businesses are trying to raise prices without scaring off customers.

Jim Hall,

who owns Orsi’s, an Italian bakery and pizzeria in Omaha, Neb., said business is close to pre-pandemic levels. But his costs are up as well. Flour costs 72% more. Boxes are up 32%. Cheese and meat are also more expensive, as is gasoline for his deliveries. He has already raised his prices once and will probably have to do so again, he said.

The war in Ukraine, a major wheat exporter, will likely raise his flour prices further, Mr. Hall said.

“People are still purchasing stuff. They understand it’s all across the board,” he said. “But it’s going to come to a certain point [that] they’re going to have to cut back.”

Write to David Harrison at david.harrison@wsj.com