WASHINGTON - US retail sales plunged by the most in almost two years in January -- a bigger drop than forecast and one that follows an unexpected uptick in inflation that President Donald Trump has vowed to tame.
The fall in sales came as cold weather hit much of the country alongside wildfires in California, data showed Friday, reflecting broad declines across different product categories.
Households have also been drawing down on savings, grappling with stubborn inflation and facing uncertainty over Trump's threats of tariffs on goods from major US trading partners.
Retail sales fell 0.9 percent between December and January to $723.9 billion, partly due to slumping auto sales, the Commerce Department said.
This was the biggest month-on-month drop since early 2023 and a significantly larger decline than the 0.2 percent fall predicted by economists polled by the Dow Jones Newswires and The Wall Street Journal.
Analysts generally expect growth in the world's biggest economy to cool this year, and are closely eyeing the strength of consumption -- a key economic driver.
Experts warn that blanket duties, if imposed for a prolonged time, would mean importers face higher costs that could be passed on to consumers.
Although Trump has threatened sweeping levies on both US allies and adversaries, tariff hikes have largely not taken effect as countries negotiate with Washington.
Out of 13 categories logged by the Commerce Department, only four saw month-on-month growth including sales at gas stations and those at restaurants and bars.
Sales at autos and parts dealers in particular dropped by 2.8 percent last month, while those at clothing stores, building material dealers and furniture shops also slid.
Excluding motor vehicles and parts, retail sales still fell 0.4 percent from December to January.
But from a year ago, retail sales in January were up 4.2 percent, the Commerce Department added.