US Retail Sales Plunged Along With Temperatures In January After Bustling Holiday Season

Washington: US retail sales dropped sharply last month, partly because cold weather kept more Americans indoors, denting sales at car dealers and most other stores. Retail sales dropped 0.9 per cent in January from the previous month, the Commerce Department said, after two months of healthy gains. It was a much bigger drop than economists expected and the biggest decline since last January. According to Pantheon Macroeconomics, the average temperature in January was the lowest since 1988, and it was particularly disruptive in the South. Devastating fires in Los Angeles may have also impacted spending.

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Retail Sales Drop Amid Harsh Winter

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Yet inflation ticked higher last month, underscoring its persistence despite the Federal Reserve's efforts to cool prices through higher interest rates. The cost of groceries jumped in January from the previous month, pushed higher by soaring egg prices. Rising costs could be exacting a toll on shoppers. President Donald Trump is also stepping up tariff threats, which could raise prices further. Trump said Thursday he would soon impose “reciprocal” tariffs on countries that levy large duties on US goods exports. Trump has already added 10 per cent import taxes on goods from China and has said he will place 25 per cent tariffs on all steel and aluminium imports.