Retail Sales Edge Lower

Retail Sales Edge Lower

U.S. retail and food service sales remained relatively stable in the early weeks of 2026 despite growing consumer uncertainty. Sales dipped 0.2% in January from the previous month, but were 3.2% higher than a year earlier, according to delayed figures from the U.S. Commerce Department. Total sales reached $733.5 billion for the month. The data are seasonally adjusted but do not account for inflation.

Among retail sectors, building materials and garden equipment stores—a category closely tied to the housing market and one that has trailed many other sectors in recent years—posted a 0.6% monthly increase in January. The category was also among the strongest performers on a yearly basis, recording a 4.3% gain compared with January 2025.

Meanwhile, food service and drinking places saw sales decline 0.2% from December, though the sector still registered a 3.9% year-over-year increase, even as many restaurants continue to face cost pressures and shifting consumer spending patterns.

Looking ahead, economists expect February retail data to reflect the impact of harsh winter weather across parts of the country. Tim Quinlan, chief economist at Wells Fargo, said the conditions could weigh on short-term spending, although the arrival of tax refunds should provide support for consumer activity heading into the spring.

“One big caveat will be how gas prices evolve in the wake of the conflict in Iran, with households particularly sensitive to prices at the pump,” Quinlan wrote in a March 6 research note.

Quinlan also noted that the average U.S. gasoline price rose by about 25 cents per gallon during the first week of March compared with February’s average, a factor that could further influence consumer spending in the months ahead.