U.S. December Retail Sales Flat, Core Data Weak; GDP Growth Outlook Under Pressure

December 2025 retail sales stood nearly flat with the prior month, revised down from a 0.6% increase in November, according to the U.S. Department of Commerce. Core and closely watched categories also posted little to no growth, contrasting with gains in construction materials and sports goods, and a 0.1% monthly decline in restaurants and bars. The 0.1% monthly contraction in core retail sales follows a previously reported 0.4% increase in November and reflects broader weakness in 13 major categories, with apparel, furniture, and auto dealers posting declines. Economists warn that this could lead to downward revisions in fourth-quarter GDP and early-year growth forecasts. Household savings, at 3.5% in November, remain at multi-year lows, suggesting some consumption is being financed by reduced savings. Small business optimism fell to 99.3 in January, the lowest in three months, with tax burdens and labor quality cited as key concerns, though some firms expect stronger sales in the coming months.