Tariff Uncertainty Weighs on Consumer Behavior
Trade policy uncertainty also played a role in distorting retail patterns. A 25% tariff on Mexican and Canadian goods, originally expected earlier, was delayed until March, while a 10% tariff on Chinese goods took effect in January. These factors likely influenced consumer spending patterns, as households made advance purchases in late 2023 to avoid potential price increases.
Core Retail Sales Decline, Raising Concerns for Consumer Spending
Excluding autos, gasoline, building materials, and food services—key components of core retail sales—spending fell 0.8% in January, erasing December’s 0.8% gain. This measure closely tracks the consumer spending portion of GDP, making the weakness a potential concern for economic growth in the first quarter. Economists had forecast a 0.3% rise in…
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