Last month witnessed a dip in retail spending in the United States, marking the first decline since August.
January's retail sales took a dip of 0.9% compared to the previous month, as per the Commerce Department's report released on Friday. Contrary to December's revised 0.7% growth and economists' predictions of a 0.4% decline, this figure fell short. It's important to note that these figures are unadjusted for inflation.
The spending decrease was noticeable across various categories. Shoppers spent the least at specialty stores and auto dealerships last month. Retail and food service establishments account for roughly a third of total spending in the United States.
While we don't have specific data for January 2023, we can infer some patterns from the 2025 data. In January 2025, retail sales saw a steeper than expected decline of 0.9%, with categories like autos, sporting goods, and furniture stores experiencing significant decreases. This decline was primarily attributed to severe winter weather and deadly wildfires. However, it's also suggested that factors such as inflation, high borrowing costs, and rising debt defaults might be influencing retail sales beyond weather-related issues.
Meanwhile, in December 2023, retail sales saw a moderate increase of 3.9% compared to the same period in the preceding year. Goods prices rose a mere 0.3% during this period.
As this is a developing story, expect updates in the near future.
The unexpected 0.9% plunge in January's retail sales has raised concerns among economists, as it contradicts their predictions and December's revised growth. This decline in consumer spending could potentially affect various sectors of the economy, including the business world. The retail sector, which accounts for a significant portion of total spending in the United States, could be particularly impacted.
