Retail sales fall 0.8% in January from December as shoppers take a break after strong holiday season

NEW YORK — Americans took a break from spending in January after the traditional holiday splurges.

Retail sales fell 0.8% in January from the strong pace in December, when they rose a revised 0.4%, according to Thursday’s Commerce Department report. Excluding sales at car dealers and petrol stations, turnover fell by 0.5%.

Economists had expected Americans to cut back on spending late last year under the weight of credit card debt and dwindling savings. But despite these challenges, along with higher borrowing costs and higher prices, household spending is still fueled by a strong labor market and rising wages.

There was another surprise hiring burst in early 2024, as employers added 353,000 jobs in January, further evidence that the highest interest rates in two decades, intended to slow the economy, have not yet taken hold.

But shoppers appeared to slow their spending in January.

Turnover at clothing and accessory stores fell by 0.2%. Turnover at building materials and suppliers fell by 4.1%, due to a still weak housing market. Online sales fell by 0.8%. Turnover at restaurants increased by 0.7%