WASHINGTON (AP) — Retail sales in the United States experienced a steeper decline than anticipated in January, causing concerns about the strength of the country’s consumer spending.
According to data from the Census Bureau, retail sales fell 0.8% in January, significantly higher than the 0.2% decrease that economists had predicted. This decline follows a surprise 0.6% increase in December, which was later revised down to 0.4%.
The substantial month-over-month decline was the most significant since March 2023. Excluding auto and gas sales, January sales decreased by 0.5%, in contrast to the expected 0.2% increase.
Of the 13 categories highlighted in the report, nine saw decreases from the previous month. Building materials and garden equipment experienced the largest decline at 4.1%, while sales at miscellaneous store retailers fell by 3%. Conversely, sales at furniture and home stores rose by 1.5%.
The January report was particularly anticipated by investors seeking signs of a “soft landing” in the US economy, where inflation cools to the target 2% rate without a severe downturn in economic activity.
Some analysts have expressed concern that the decline in January retail sales could lead to a significant slowdown in economic growth in the first quarter. Andrew Hunter, deputy chief US economist at Capital Economics, stated that “the upshot is that Fed officials may not need to worry much longer about the possibility of continued economic resilience reigniting inflation.”
The latest data on retail sales has raised questions about the future of consumer spending in the United States and its potential impact on the overall economy. Although the outlook remains uncertain, economists and investors will be closely monitoring future consumer spending trends to gauge the health of the economy.