US Retail Sales See Steepest Drop in Two Years

U.S. retail sales experienced a significant decline in January, falling by 0.9%, the steepest drop in nearly two years and more than the anticipated 0.2% decrease. This was attributed to severe winter weather, wildfires in California, and ongoing inflationary pressures. Nearly all retail categories saw declines, particularly motor vehicles, sporting goods, and furniture stores. The control group of retail sales, which excludes volatile items like autos and gas, also fell by 0.8%, contrary to expectations of a 0.3% increase. The decline follows a strong holiday season and may indicate broader economic challenges, as consumers face high borrowing costs and inflation. Despite the setback, labor market strength continues to support wage growth, providing some economic stability.