Consumers pull back as retail sales dip to start 2026

American consumers pulled back their spending to start 2026, extending the malaise in retail sales that began late last year.

Retail sales fell 0.2% in January, following a flat reading in December, according to the Commerce Department’s report issued on Friday. January’s figure came in below the forecasts of economists, who were expecting another flat reading. The report was delayed because of the 43-day government shutdown.

The January retail figure was weighed down by a sales decline at motor vehicle and auto parts dealerships. Gas stations also saw a drop, reflecting lower gas prices in January, though the intensifying war in the Middle East has driven up prices in recent days. The national average price for a gallon of unleaded gasoline was $3.32 Friday; a week ago, it was $2.98, according to AAA.

Excluding business at gas stations and auto dealers, retail sales rose 0.3% in January, according to the Commerce Department.

Economists believe that severe winter weather throughout most of the country also hurt sales as shoppers were unable to go to physical stores. In fact, online retailers enjoyed a 1.9% sales increase in January.

Read the full story from the Associated Press.