United States retail sales fell 0.2% in January to US$733.5 billion, the first monthly decline since October and below the flat reading economists had expected, according to Commerce Department data released on Friday after being delayed by the 43-day government shutdown.
The report landed alongside a February jobs print showing 92,000 positions cut and unemployment rising to 4.4%, with hiring deteriorating from the 126,000 added in January.
The so-called control group - which strips out autos, petrol, building materials and restaurants, and feeds directly into GDP calculations - rose 0.3%, suggesting underlying consumption held up better than the headline figure.
Motor vehicle dealers dragged the top line lower with a 0.9% decline, while petrol stations dropped 2.9%, largely reflecting lower pump prices in January rather than weaker demand.
The intensifying U.S.-Iran conflict has since pushed the national average to $3.32 a gallon, up from $2.98 a week earlier, according to AAA.
Health and personal care stores fell 3%, clothing dropped 1.7%, and consumer electronics slipped 0.6%, with severe winter weather keeping shoppers away from physical stores across much of the country.
Non-store retailers posted a 1.9% gain, while home furnishings rose 0.7%, building materials added 0.6%, and miscellaneous stores climbed 2%.
Year-on-year, retail sales were up 3.2%, and the three-month period from November 2025 through January 2026 was 2.9% higher than the same window a year ago.
Wells Fargo economist Tim Quinlan noted spending was sturdier than the headline figure suggested, and that higher tax refunds should support consumption in March.
He flagged rising petrol prices as a risk, noting national averages were already up 25 cents in the first week of March compared with February.
The Conference Board's consumer confidence expectations index sat at 72.0 in February, below the 80 threshold that has historically preceded a recession within 12 months.
The next retail sales release covers February data and is scheduled for 16 March.
