December retail sales had a disappointing ending compared to what was predicted for consumer spending. According to the Commerce Department, retail sales were flat for the month, following a 0.6% increase in November and fell short of economists expectations for a 0.4% gain. Even when excluding purchases related to vehicles, sales showed no growth, reinforcing concerns that holiday spending lost momentum.
On a yearly basis, retail sales rose 2.4% which was slower than November's 3.3% pace and below December's inflation rate of 2.7%. Therefore, consumer spending failed to keep up with rising prices which is not good as consumer spending accounts for more than two-thirds of the U.S. economic activity.
This slowdown was uneven with furniture, clothing, electronics, and miscellaneous retailers all posted declines and online sales barely increased. Building materials and garden centers had a stronger gain which could mean consumer spending priorities could be shifting. Economists also stated factors such as harsh weather, tariffs, and high prices affected the holiday shopping season.
Despite the weak December report 2025 was not a poor year for retail. The pattern of spending showed a "k-shaped" economy. Looking ahead consumer spending in early 2026 could slow down more with the growing uncertainty with the labor market and wage growth. This shows the growing pressure on households as inflation and higher costs limit discretionary spending.
https://www.cnbc.com/2026/02/10/december-retail-sales-were-flat-missing-expectations.html
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