U.S. retail sales unexpectedly fell in January, recording their biggest drop in nearly a year, as households cut back on purchases of motor vehicles and building materials.
The Commerce Department said on Wednesday that retail sales decreased 0.3 percent last month, the largest decline since February 2017. Data for December was revised to show sales unchanged instead of rising 0.4 percent as previously reported.
Economists polled by Reuters had forecast retail sales climbing 0.2 percent in January. Retail sales in January rose 3.6 percent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month after a downwardly revised 0.2 percent drop in December. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
They were previously reported to have gained 0.3 percent in December. Last month's unchanged core retail sales reading pointed to a slowdown in consumer spending at the start of the year. The downward revision to December's data suggested that the government could lower its fourth-quarter estimate for consumer spending.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was reported to have increased at a 3.8 percent annualized rate in the fourth quarter. The economy grew at a 2.6 percent pace in the final three months of 2017.
Last month, auto sales fell 1.3 percent after slipping 0.1 percent in December. Receipts at service stations rose 1.6 percent, reflecting higher gasoline prices. Sales at building material stores dropped 2.4 percent, the largest decline since April 2016.
There were also declines in sales at furniture and health and personal care stores. Sales at electronics and appliance stores rose 0.5 percent. Receipts at clothing stores increased 1.2 percent. Sales at online retailers were unchanged as were those at restaurants and bars.
Receipts at sporting goods and hobby stores fell 0.8 percent.
© 2023 Thomson/Reuters. All rights reserved.