Retail sales measure the total value of goods sold in retail stores, covering various products like clothes, electronics, and food. It’s reported monthly and provides insight into consumer spending. Higher retail sales suggest a strong economy as people are spending more money. While lower sales can signal economic slowdowns as people might be spending less.
This indicator is crucial for understanding the health of the economy since consumer spending makes up a large part of it. Economists and policymakers closely monitor retail sales to gauge economic performance and make informed decisions. Retailers also use this data to plan their strategies and meet consumer demand effectively.
January Retail Sales
The U.S. Census Bureau reported that January 2025 retail and food service sales were $723.9 billion, down 0.9% from the previous month, but up 4.2% from January 2024.
For the period from November to January, total sales increased by 4.2% compared to the same period the previous year. The reported change from November to December 2024 was revised from 0.4% to 0.7%.
Retail trade sales fell by 1.2% from December 2024 but rose by 4.0% from January 2024. Motor vehicle and parts dealers saw a 6.4% increase from last year, and food service and drinking places saw a 5.4% increase from January 2024.
This report shows that U.S. retail and food service sales are growing overall, even with some monthly ups and downs, suggesting a strong economic environment.
Source: Census.gov
Impacts on the market
The unexpected drop in retail sales raised concerns about consumer spending and economic growth.
Mixed results showed strong yearly growth, but a monthly decline created uncertainty among investors, prompting a cautious approach.
Overall, the report highlighted the resilience of the retail sector despite monthly fluctuations. However, the immediate market reaction was cautious due to concerns about consumer spending trends.
The S&P 500 has hit its all-time high resistance zone at 6136. If the RSI can break its downward trend line with strong momentum and the price can overcome the 6136-resistance area, a further surge is anticipated.
