Americans tightened their purse strings at the beginning of 2026, continuing a pattern of reduced consumer spending that started in the final months of last year.
January retail sales dropped by 0.2% after remaining unchanged in December. The January decline surprised economists who had predicted sales would remain flat for the month.
Health and personal care retailers experienced the steepest downturn, with sales plummeting 3% compared to December figures. Fuel stations recorded a 2.9% decrease in revenue, while apparel retailers saw purchases drop by 1.7% from the previous month.
However, some retail sectors bucked the downward trend. Home decoration and building supply stores, including garden and landscaping retailers, posted increases. Furniture and home decor businesses recorded a 0.7% uptick in sales, while construction material vendors experienced a 0.6% boost.
Despite the monthly decline, January 2026 retail sales remained 3.2% higher than the same period in 2025.
