U.S. Retail Sales (December 2025)

Retail sales take a breather in December

• Retail sales remained flat in December, taking a break after a solid gain in November. The headline figure came in weaker than the consensus forecast, which called for sales to increase by 0.4% month-over-month (m/m).
• Sales of autos and parts edged lower by 0.2% m/m, while sales at gasoline stations were slightly higher on the month (+0.3% m/m). Meanwhile, sales at building and garden retailers posted a solid gain (+1.2% m/m), advancing for the second consecutive month. 
• Sales in the "control group", which excludes the three above categories, edged lower (-0.1%). November's gain was also revised lower to 0.2% m/m (from 0.4% m/m). Sales declined at furniture & home furnishing stores (-0.9%) and miscellaneous store retailers (-0.9% m/m), but the pullback in the latter followed three months of strong gains. Ditto for clothing and accessory stores (-0.7% m/m). Sales changed little elsewhere. 
• Following a solid gain in November, spending at bars and restaurants was soft in December (-0.1% m/m). This is the only service category in the report.

Key Implications

• Retail sales ended the year on a softer footing. After rising for two consecutive months, core sales took a breather in December, while the negative revisions to the previous two months suggest that retail spending had a bit less bounce in its step than previously reported. Still, consumer spending remained resilient through the final quarter of 2025, which was marked by a lengthy government shutdown. According to our tracking, consumer spending likely increased by around 3.0% (annualized) in Q4 2025, only slightly lower than the 3.5% gain in the previous quarter.
• As we wrote in our recent report, although consumers at different income levels are experiencing diverging economic outcomes, overall consumer spending is expected to remain robust through 2026. Households are expected to benefit from OBBBA-related fiscal support via higher tax refunds and lower income taxes. Tax refunds, expected between February and April are likely to average $800-$1,000 more than usual, helping to temporarily boost income and spending. Easier financial conditions, previous wealth gains, and some stabilization in the labor market will also help.

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