U.S. Retail Sales Stall as Consumer Fatigue Sets In

U.S. retail sales flatlined in December, marking consumer fatigue due to rising living costs and slowing wage growth. This stagnation, together with revised retail figures for October and plummeting sales in key sectors, prompted economists to lower fourth-quarter GDP growth estimates, despite hopes for a rebound in early 2024.

U.S. retail sales remained flat in December, as consumer spending showed signs of fatigue amid rising living costs. This unexpected stall comes as households cut back on motor vehicles and other big-ticket items, adjusting their spending habits due to higher import tariffs and a softening job market.

The Commerce Department revised down retail sales figures for October, hinting at a more subdued economic landscape. Economists, noting a marginal inventory rise, have since adjusted their GDP growth estimates for the fourth quarter, forecasting a possible slowdown. January's harsh winter could further affect spending levels this quarter.

Despite setbacks, there is cautious optimism for recovery, with expected tax rebates potentially boosting consumer spending. However, experts warn that depleted savings and subdued wage growth might temper these effects, as more households focus on saving rather than immediate consumption increases.

(With inputs from agencies.)