Are U.S. consumers having a holiday “hangover” when it comes to spending? That’s what some economists think after a big drop in retail sales data showed consumers spent a lot less in January.

The Census Bureau report showed that consumers spent $723.9 billion, a decrease of 0.9% from the prior month. Economists surveyed by The Wall Street Journal and Dow Jones Newswires expected a more modest decline of 0.2%. Another key spending indicator also came in lower than expected, ﷺwith retail sales excluding automobiles and parts coming in 0.4% lower than in December, where economists expected an increase in the reading.

“I think that people opened their credit card bills in January and said, ‘Oh, wait, I'm kind of getting out of control a little bit here; I've got to pull my horns in,’” said Dan North, senior economist at Allianz Trade Americas.

Lower Furniture, Electroﷺnic Sales Point to Consumer Fatigue

Car salesꦜ were down 2.8%, while non-store retailers—a category that mostly represents e-commerce firms—reported sales were down by 1.9% in the month. Sporting goods stores, electronic retailers, furniture sellers, and building supply distributors also reported down months, while bars and restaurants, gas stations, and department stores reported sales increased. ꦦ

The decline in some categories indicated that consumers may have pushed their spending to its limits during a 澳洲幸运5开奖号码历史查询:hot holiday spending season, especially as consumers have been 澳洲幸运5开奖号码历史查询:relying more on credit ca𝓡rd spending, North said. 

“Furniture, furnishings, electronics and appliances, those all spell one thing to me, and they spell hangover. That's a hangover from the holidays,” North said. “Those are things that I think people probably spend a lot of money on in the holidays; you can see those numbers are pretty big in December and November.”

Retail Spending Expected to Improve

There were some signs of strength in the report, with 澳洲幸运5开奖号码历史查询:December’s sales totals being adjusted higher to now re💦flect a 0.7% gain in tꩲhe prior month, making the January decline larger by comparison. 

Also, seasonal conditions could have also contributed to the decline, including winter weather and the disruptions from the California wildfires, some economists said. Overall, the report didn’t indicate a long-term slowdown in spending, analysts said. However, the January data could be enough to begin undercutting first-quarter 澳洲幸运5开奖号码历史查询:gross domestic product (GDP) results. 

“We anticipate a healthy rebound this month as weather conditions have normalized, and consumers resume a solid pace of spending,” wrote Nationwide Chief Economist Kathy Bostjancic. “That said, given the strong momentum for consumer spending has softened and even assuming a healthy rebound in February, consumer spending for the quarter looks to be running at half the ebullient 4.2% pace recorded in Q4.”