January Retail Sales Fall 0.9%, Marking Largest Decline in Nearly Two Years

Economists point to holiday spending fatigue, weather disruptions, and tariff uncertainties as key factors behind the unexpected drop.

Retail and food service sales dropped 0.9% in January from December, far exceeding the 0.2% decline economists had forecast.
The decline follows a strong holiday season, with economists attributing the slump to holiday overspending, severe winter weather, and California wildfires.
Non-store retailers, including eCommerce, saw a 1.9% month-over-month decline, while sporting goods, electronics, and furniture stores reported steep drops in sales.
Year-over-year retail sales grew 4.8%, indicating underlying consumer strength despite the month-to-month contraction.
Economists suggest spending may rebound in February, but ongoing inflation, high borrowing costs, and potential tariff impacts remain concerns for future retail performance.