Slower Retail Sales in January, But the Economy is Still Expanding

Data released by the U.S. Census Bureau shows retail sales slowed in January following a strong holiday season but still rose year over year, National Retail Federation Chief Economist Jack Kleinhenz said.

“It’s reasonable to expect some slowdown from the vigorous 2024 holiday season, so January’s numbers are not a surprise and don’t contradict the consumer spending trends we experienced,” Kleinhenz said. “The slower spending reflects weaker payroll growth in January, and higher prices remain a challenge for most households. Cold weather in many parts of the country and wildfires in California were likely headwinds that disrupted demand and consumer patterns. Nonetheless, these results point to a stable economy and provide a solid start to 2025.”

The Census Bureau said overall retail sales in January were down 0.9% seasonally adjusted month over month but up 4.2% unadjusted year over year. That compared with increases of 0.7% month over month and 4.4% year over year in December.

January’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were also down 0.9% seasonally adjusted month over month but up 4% unadjusted year over year. Core sales were up 4.1% year over year on a three-month moving average.

The results come after core retail sales grew 4% year over year during the 2024 holiday season and 3.6% for the full year.

Earlier this week, the CNBC/NRF Retail Monitor, powered by Affinity Solutions, reported that core retail sales were down 1.27% seasonally adjusted month over month in January but up 5.72% unadjusted year over year. That compared with increases of 2.19% month over month and 8.41% year over year in December.