Consumers cut spending sharply in January, indicating a potential weakening of economic growth, according to a Commerce Department report Friday.
retail The month’s 0.9% declined from a 0.7% increase in December, even worse than the Dow Jones estimates that it fell by 0.2%. Total sales were seasonally adjusted, but prices rose 0.5% in a month.
Excluding cars, prices fell by 0.4%, and far exceeded consensus forecasts, up by 0.3%. A “control” measure that directly splits several non-essential categories and numbers into GDP fell 0.8%, and has since grown 0.8%.
As consumer spending accounts for about two-thirds of all economic activity in the U.S., sales figures indicate a potential weakening of growth in the first quarter.
Receipts for sports goods, music and bookstores fell 4.6% in the month, while online stores reported a 1.9% decline, and auto and parts spending fell 2.8%. Gas stations, as well as food and drinking venues, all reported an increase of 0.9%.
Stock market futures After issuance, it was held on slightly negative territory, while the Ministry of Finance produced lost ground. Traders have bets that the Fed can lower interest rates again after June.
“The decline is dramatic, but several mitigation factors indicate no alerts. Some of them can be painted as bad weather, while some people made car sales in January due to the unusual growth of the fat dealer incentives in December after unusual December growth. ,” Robert Frick, corporate economist at Naval Federal Credit Union. “Especially given the large December revision, the rolling average of consumer spending remains stable.”
Inflation is still ahead of the Fed’s 2% target. this Consumer Price Index The growth rate in January was 0.5% and the annual inflation rate was 3%. but, Producer price indexagents for wholesale prices show that critical pipeline inputs are somewhat softened.
In other economic news on Friday, the Bureau of Labor Statistics reported Import price January accelerated by 0.3%, which fits expectations for the biggest one-month move since April 2024. On a year-on-year basis, import prices rose by 1.9%.
Fuel prices rose 3.2%, the biggest gain since April 2024. Food, feed and beverage costs rose 0.2% after a 3% increase in December.
Export prices also rose by 1.3%.
