Retail sales in the U.S. recorded their largest drop in almost a year, as households seem to be tightening their belts when it comes to major purchases like new cars and building materials, according to CNBC reports.
The latest figures out of the U.S. Department of Commerce show retail sales decreased 0.3 percent last month in their biggest falloff recorded since February 2017. The revised data for December also saw something of a downward adjustment, with sales figures shown to be unchanged as opposed to the up 0.4 percent as previously reported. Economists had not been expecting a contraction, and retail sales had been forecast to rise 0.2 percent in January.
Year-on-year, retail sales numbers rose 3.6 percent, however.
Removing automobiles, gasoline, building materials and food services from consideration to look at just the core retail sales numbers, growth was flat last month after a downwardly revised 0.2 percent drop in December.
Core retail sales basically correlate with the consumer spending component of the nation’s gross domestic product (GDP). That downward reversal is also notable, as the figure was initially reported to have gained 0.3 percent in December. The unchanged nature of core retail last month indicates a slowdown in consumer spending to the start the year.
The downward revision to December’s data also suggests that the government could lower its fourth-quarter estimate for consumer spending. Consumer spending accounts for two-thirds of U.S. economic activity, and was reported to have picked up at a 3.8 percent annualized rate in the fourth quarter. Likewise, the economy grew at a 2.6 percent pace in the final three months of 2017.
In other sales news, auto sales were down 1.3 percent in their second month in a row of declines. Receipts at service stations rose 1.6 percent, reflecting higher gasoline prices, and sales at building material stores dropped 2.4 percent — their largest decline since April 2016.
Furniture, health and personal care stores all saw declines, too, but apparel and electronics dealers saw increases.