US retail spending plunged last month, falling for the first time since August
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American shoppers pulled back on their spending last month for the first time since August as stubborn inflation continued to bite and harsh weather curbed economic activity, AmericanDiary24 reports via CNN.
Retail sales plunged 0.9% in January from the prior month, the Commerce Department said Friday. That’s down sharply from December’s upwardly revised 0.7% gain and well below economists’ expectations of a 0.4% decline. The figures are adjusted for seasonal swings but not inflation.
Shoppers reined in their spending across multiple categories last month. Specialty stores and auto dealers were hit hardest, with spending falling 4.6% and 3%, respectively.
US stocks were mostly flat Friday morning at market open, with all three major indexes up just 0.1%.
A key measure that excludes volatile components, referred to as the “control group,” was down 0.8% in January. Spending at restaurants, bars and department stores remained in positive territory last month.Sales at retailers and food establishments account for about a third of overall spending in the US. The American economy is driven by consumer spending, accounting for about 70% of economic output.
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