Following robust spending at the close of 2024, Retail Sales fell by 0.9% in January, significantly underperforming the -0.1%forecasts. The control group reading, which excludes autos, gasoline, building materials, and food services, also dropped by0.8%. These figures represent the largest monthly decrease in two years, with spending declines observed in nine of the report’s13 categories.
What’s the bottom line?
While adverse weather conditions and severe fires in Los Angeles likely influenced the overall spending decline, they do not fully account for the nearly 2% drop in online sales. Additionally, outstanding credit card debt has reached an unprecedented $1.2 trillion, suggesting that January’s decreased spending may also stem from the necessity to manage post-holiday and other financial obligations.