Key facts
- January retail sales fell 0.9%, exceeding the 0.1% expected decline.
- This marks the steepest drop in retail sales since March 2023.
- Sales excluding food services, auto dealers, building materials, and gasoline fell 0.8%.
US retail sales dropped 0.9% in January, a steeper decline than the 0.1% forecast and the largest fall since March 2023. Severe weather and wildfires impacted consumer spending, with significant drops seen in sporting goods, motor vehicles, and furniture sales.
The sharper-than-expected drop in US retail sales indicates weakening consumer demand, which could impact economic growth and influence future monetary policy decisions by the Federal Reserve.
US retail sales contracted 0.9% in January 2025, significantly worse than the 0.1% decrease that economists had predicted. This downturn follows an upwardly revised 0.7% gain in December and represents the most substantial decline in retail sales since March 2023. Factors such as severe weather conditions and wildfires in Los Angeles were cited as contributing to the slump in consumer spending. The data is not adjusted for inflation.
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