Preview: Due March 6 - U.S. January Retail Sales - Weather adding to downside risk
We expect retail sales to see a weak month in January, falling by 0.7% overall, with declines of 0.4% ex auto and 0.2% ex auto and gasoline. Bad weather late in the month will contribute to the decline.
Industry data shows a significant dip in auto sales while CPI showed a decline in gasoline prices in January.
Weather is not the only downside risk. Consumer spending ran well ahead of near flat real disposable income in both Q3 and Q4, suggesting that a loss of momentum in December retail sales may continue in January.
Retail sales in January are often sensitive to weather, falling by 0.8% in January of 2025 and 2024 but surging by 4.4% in January of 2023 when weather was unusually mild, before correcting in subsequent months
A 0.2% decline ex auto and gasoline would be the weakest since a 0.5% fall in January 2025. 3 month/3 month data would be the weakest since early 2024, overall, ex autos and ex autos and gasoline.
