2026-02-11
U.S. December 2025 Retail Sales Flat, Below Expectations
Data released by the U.S. Department of Commerce on February 10, 2026 showed that retail sales in December 2025 totaled USD 735.0 billion, flat from November (0% MoM), falling short of market expectations for a 0.4% increase and below November’s 0.6% gain. On a year-over-year basis, growth slowed to 2.4% from 3.3% in November, indicating that momentum faded toward the end of the holiday shopping season. This marked the first flat monthly reading since 2024 and suggests a cooling in consumer spending momentum.
By category, weakness across several segments weighed on the overall performance:
Motor vehicle and parts dealers reported a decline, as trade tensions dampened demand.
Furniture stores fell 0.9% MoM, electronics and appliance stores declined 0.4%, and clothing stores dropped 0.7%.
Sales at restaurants and bars also decreased, reflecting softer discretionary spending.
Building materials and garden equipment rose 1.2%, while gasoline stations edged up 0.3%, providing partial support.
Core retail sales, excluding autos, gasoline, building materials, and food services, declined 0.1% MoM.
Overall, persistent inflationary pressures and a high interest rate environment continued to constrain consumption, while tariff-related uncertainties weighed on confidence.
In summary, December retail sales unexpectedly stalled, with annual growth moderating to 2.4%, signaling more cautious consumer behavior amid elevated prices and policy uncertainty. In the near term (1–2 months), retail activity is likely to remain subdued, with monthly growth potentially limited to 0.2–0.4% amid a wait-and-see stance from the Federal Reserve and ongoing tariff concerns. Over the medium term, if the labor market remains resilient and inflation continues to ease, retail sales growth could recover to around 3% YoY within six months. However, escalating trade tensions remain a key downside risk.
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