U.S. Retail Sales in December Remain Unchanged, Falling Short of Forecasts

U.S. retail sales for December 2025 came in **flat compared with November**, a result that disappointed economists who had anticipated a modest increase in consumer spending. The data, released on February 10, showed that December retail sales failed to rise month-over-month, despite forecasts for a gain, indicating softer spending in a key period of the holiday season.

Unexpected Lack of Growth in Consumer Spending

According to the U.S. Census Bureau data, retail sales in December remained essentially unchanged after November’s reported 0.6% increase. Economists surveyed ahead of the release had expected sales to grow by around 0.4% for the month.

This flat result suggests that consumer demand — typically a major driver of economic growth — softened at the close of 2025, leaving analysts and markets cautious about the strength of the holiday shopping season.

Core Sales Also Show Weakness

When excluding volatile categories such as automobiles, gasoline, building materials, and food services (often used to measure underlying spending trends), **“core retail sales” actually dipped slightly** in December. This marks a rare monthly decline in what is often considered a more stable gauge of consumer behavior.

Previous figures for November were also revised downward — adding to concerns that the U.S. consumer may be losing momentum.

Why December Sales Disappointed Analysts

Several factors may have contributed to the disappointing sales figures:

• Delayed reporting of economic data due to the prolonged government shutdown made it harder for analysts to fully predict trends.
• Economic uncertainty, including a softer labor market and concerns about tariffs and inflation, may have curbed consumer confidence.
• Some retail sectors reported declines in sales, particularly electronics, clothing, and furniture stores — sectors that are often sensitive to changes in spending patterns.

Even restaurants, typically seen as a marker of discretionary spending and confidence, posted a slight decrease in December sales compared to November.

Annual Retail Sales Still Positive

Despite the disappointing monthly figures, annual retail sales for 2025 remained higher than the previous year, showing modest growth overall. Many analysts point out that while December was weak, the broader year-long trend still reflects an economy where consumers continued to spend, albeit unevenly.

This highlights the complexity of interpreting consumer trends: a single month of flat data doesn’t necessarily negate a positive annual narrative, but it does raise concerns about momentum as the U.S. economy enters 2026.

Market Reaction and Outlook

Financial markets reacted cautiously to the report, with stock futures showing modest declines as investors absorbed the softer spending data. Analysts noted that disappointing retail sales could influence expectations for economic growth and corporate earnings in early 2026.

Some economists expect the Federal Reserve and policymakers to closely monitor consumer behavior, especially as decisions about interest rates and monetary policy continue. Consumer spending accounts for a large portion of U.S. gross domestic product (GDP), making retail sales a key indicator of economic health.

Looking Ahead

With January and February data still pending, analysts will be watching the next few economic releases to determine whether December’s flat sales were a short-term pause or an early sign of slower consumer activity in 2026. The delayed reporting schedule due to the 2025 government shutdown adds uncertainty, making real-time interpretation even more challenging.

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