Americans did a solid amount of spending during the holiday season.
Once it was over, though, not so much.
U.S. consumers slowed down their spending in January, more than many observers expected, according to statistics released by the Commerce Department.
Retail sales dropped 0.8% in January from December, when they rose a revised 0.4%, the Commerce Department reported Thursday. Excluding sales at auto dealerships and gas stations, sales were down 0.5%. The decline was bigger than the 0.10% drop that economists expected and marked the lowest monthly figure since March of last year, the Associated Press reported.
Economists had expected Americans to pull back on spending late last year as credit card debt and shrinking savings accounts took their toll. But household spending continues to be fueled by a strong jobs market and rising wages.
Employers added 353,000 jobs in January, perhaps showing the Federal Reserve’s consistent interest rate hikes – 11 of them since March 2022 — have yet to take hold.
But shoppers appeared to be slowing down their spending in January. Business at clothing and accessory stores was down 0.2%. Sales at building materials and supplier suppliers fell 4.1%, reflecting a still weak housing market. Business at general merchandise stores was unchanged. Online sales fell 0.8%. Business at restaurants were up 0.7%, the AP reported.
Consumer inflation in the United States cooled last month, but compared with a year ago, prices are up 3.1%. That’s well below the 9.1% inflation peak in mid-2022, but still higher than the Federal Reserve’s 2% target level.
