U.S. retail spending declined slightly in January as severe winter weather disrupted shopping patterns and key sectors including gasoline and apparel posted losses.
By yourNEWS Media Newsroom
Retail sales in the United States declined in January as severe winter storms disrupted consumer activity across much of the country, according to new data released March 6 by the U.S. Census Bureau.
Total retail transactions fell 0.2 percent during the month, marking the first decline since October 2025. The drop followed a flat reading in December and came in slightly better than economists’ expectations of a 0.3 percent decline.
The downturn was driven largely by reduced activity in several major retail categories. Sales at gasoline stations dropped 2.9 percent, while clothing and apparel stores recorded a 1.7 percent decline. Motor vehicle and parts dealers also saw sales fall 0.9 percent, and appliances and electronics retailers experienced a 0.6 percent decrease.
Some sectors, however, recorded gains despite the broader slowdown. Online retailers saw sales increase 1.9 percent, furniture stores posted a 0.7 percent rise, and miscellaneous retailers experienced a 2 percent increase in sales.
Bank of America analysts said weather conditions likely played a major role in the January slowdown, as severe winter storms affected large portions of the country late in the month.
“While spending was solid throughout the month, winter storms toward the end of January led to significant declines in spending in affected regions,” strategists at the financial institution wrote in a Feb. 11 report.
When excluding volatile categories such as automobiles and gasoline, retail sales rose 0.3 percent in January following an upwardly revised 0.1 percent increase in December.
The retail sales control group — a measure that removes several volatile components including autos, gasoline, office supplies and tobacco — also climbed 0.3 percent. Economists closely monitor this category because it feeds directly into the goods-spending portion of gross domestic product calculations.
Economic growth in the first quarter of 2026 is currently projected to reach roughly 3 percent, according to the Federal Reserve Bank of Atlanta’s GDPNow model. The forecast indicates that consumer spending and private-sector investment are helping drive early-year growth.
Consumer spending plays a central role in the U.S. economy, accounting for roughly two-thirds of overall economic activity. As a result, sustained weakness in retail activity could have broader implications for growth.
Some analysts believe consumer spending could strengthen in the coming months as households receive higher tax refunds tied to provisions in the One Big Beautiful Bill Act.
Bank of America analysts noted that many households remain financially stable despite ongoing affordability pressures.
“Households remain adaptive and financially stable overall in the face of significant affordability challenges, supported by trading-down behaviors, elevated savings and ‘dry powder’ to borrow,” the bank’s strategists said.
They also said tax refunds could provide additional support for consumer spending.
The bank’s latest Consumer Checkpoint report found that total credit and debit card spending per household increased 2.6 percent year over year in January, the largest increase recorded since February 2024.
Spending patterns continue to reflect a “K-shaped” dynamic across income levels. High-income households increased spending by 2.5 percent compared with the previous year, while spending among middle-income households rose 1 percent. Spending growth among lower-income households slowed to 0.3 percent year over year.
Economic uncertainty may continue to influence consumer behavior in the coming months. Recent developments including the Supreme Court’s ruling on President Donald Trump’s tariffs and the ongoing conflict with Iran — which has pushed oil prices higher — could affect both business decisions and household spending.
The retail sales report was released the same day as the latest U.S. jobs data, which showed the economy lost 92,000 jobs in February while the unemployment rate rose to 4.4 percent from 4.3 percent.
Beth Ann Bovino, chief economist at U.S. Bank, described the latest economic indicators as concerning.
“It’s hard to find a positive read in these numbers. We saw the jobs numbers, and the change was pretty dramatic,” Bovino said during an American Bankers Association virtual event on March 6.
Upcoming consumer sentiment surveys from the University of Michigan and the Conference Board may provide additional insight into how recent economic developments are shaping public confidence.
Despite the softer retail and employment data, investors widely expect the Federal Reserve to keep interest rates unchanged at its upcoming policy meeting. Futures market data indicate most traders anticipate the benchmark federal funds rate will remain within the 3.5 to 3.75 percent range.
Federal Reserve officials have recently expressed differing views about the economic outlook as they balance their dual mandate of controlling inflation while maintaining maximum employment. Rising geopolitical tensions and weaker labor data have added new complexities to that policy debate.