Retail sales tumbled 0.8% in January, much more than expected
Consumer spending fell sharply in January, with retail sales dropping 0.8% despite expectations of a 0.3% decrease. Excluding auto sales, the decline was 0.6%, well below the anticipated 0.2% gain. Weakness was seen in building materials, garden stores, and miscellaneous stores, while restaurants and bars saw a 0.7% increase. The report, not adjusted for inflation, showed a 0.6% year-over-year increase in sales, raising concerns about the impact of high inflation on future spending. However, the strong labor market and improving manufacturing sector suggest a resilient economy. The Fed is expected to hold rates, but futures indicate possible rate reductions starting in June, with four cuts expected by the end of 2024.
link - https://www.cnbc.com/2024/02/15/retail-sales-january-2024-.html
5 comments:
I wonder how much of consumer spending is being financed by debt right now, and if that number is high I wonder if that contributed to the spending slowdown. I don't believe this will be a big deal moving forward.
Is this substantial fall in retail sales something that will affect smaller stores? Are there any stores that have had to close down because of a decrease in sales? One final question is, is this decline in sales directly related to a rise in inflation/prices.
I wonder if the fall in spending is cyclical, if there is usually a drop in consumer spending after multiple busy holiday seasons in a row. Or if this event stands out over time.
I guess the high interest rates finally slowed down consumer’s spending. I think December usually has slightly higher retail rates than the beginning of the year months, so that would not be very unlikely to happen. What surprises the most is that it drop way more than expected.
It is interesting that there have been many reports of a strong economy recently, however consumer spending is falling. Maybe this is somewhat due to falling consumer confidence in the face of continued inflation.
Post a Comment