Consumers slowed their spending as prices rose. Here are the five things we learned from U.S. economic data released during the week ending February 14.
Retail sales slumped in January. Retail and food services sales plummeted 0.9 percent to a seasonally adjusted $723.9 billion. Even after the decline, the Census Bureau measure was 4.2 percent ahead of January 2024 levels. Sales slid 2.8 percent at motor vehicle/parts dealers but rose 0.9 percent at gas stations. Net of both, core sales declined 0.5 percent in January but were up 3.9 percent from a year earlier. Sales tumbled at retailers focused on sporting goods/hobbies (-4.6 percent), furniture (-1.7 percent), building materials (-1.3 percent), apparel (-1.2 percent), electronics/appliances (-0.7 percent), and health/personal care (-0.3 percent). Sales improved at restaurants/bars (+0.9 percent), general merchandisers (+0.5 percent), and grocery stores (+0.2 percent).
Consumer inflation accelerated in January. The Consumer Price Index (CPI) rose a seasonally adjusted 0.5 percent, following gains of 0.3 percent and 0.4 percent in November and December. Energy prices surged 1.1 percent (gasoline: +1.8 percent), while food CPI jumped 0.4 percent. Net of energy and food, core CPI swelled 0.4 percent (its biggest gain since April 2023). Rising were prices for used cars/trucks (+2.2 percent), transportation services (+1.8 percent), medical care commodities (+1.2 percent), and shelter (+0.4 percent). Apparel prices fell 1.4 percent, while new car prices were unchanged. The headline Bureau of Labor Statistics measure has risen 3.0 percent over the past year as the core measure advanced 3.3 percent.
Wholesale prices gained again in January. The Producer Price Index (PPI) for final demand increased a seasonally adjusted 0.4 percent. In December, the Bureau of Labor Statistics measure grew 0.5 percent. Core wholesale prices—which nets out energy (+1.1 percent), food (+1.7 percent), and trade services (+0.1 percent)—advanced 0.3 percent. Final demand goods prices rose 0.6 percent, while those for services were up 0.3 percent. Over the past year, PPI for final demand and core PPI have swelled 3.5 percent and 3.4 percent, respectively.
Manufacturing faltered in January. The Federal Reserve estimates manufacturing production slipped a seasonally adjusted 0.1 percent following December’s 0.5 percent gain. Whereas durable goods production held steady (with a gain in aerospace equipment counterbalanced by a slowdown of motor vehicles), nondurables output slowed 0.3 percent. Overall industrial production increased 0.5 percent (down from December’s 1.0 percent jump). Mining output fell 1.2 percent while that at utilities surged 7.2. percent, thanks to frigid weather in parts of the U.S. Manufacturing production was 1.0 percent ahead of its year-ago pace, while overall industrial production’s 12-month comparable was +2.0 percent.
Small business owners’ sentiment slipped in January. The Small Business Optimism Index lost 2.3 points, giving back most of its December gains, to a seasonally adjusted 102.8 (1986=100). The National Federation of Independent Business (NFIB) measure remained 12.9 points ahead of its year-ago reading. Seven of ten index components negatively contributed to the measure, including large drops for plans to increase inventories, expected economic conditions, and whether it is a good time to expand. The press release noted companies continued to “struggle to find qualified workers.”
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending February 8, 2025, First-Time Claims, seasonally adjusted): 213,000, -7,000 vs. the previous week, +2,000 vs. the same week a year earlier). 4-week moving average: 216,000 (-0.7% vs. the same week a year earlier).
- Import Prices (January 2025, All Imports, not seasonally adjusted): +0.3% vs. December 2024; +1.9% vs. January 2024. Nonfuel Imports: +0.1% vs. December 2024; +1.8% vs. January 2024.
- Export Prices (January 2025, All Exports, not seasonally adjusted): +1.3% vs. December 2024; +0.5% vs. January 2024. Nonagricultural Exports: +1.5% vs. December 2024; +2.9% vs. January 2024.
- Business Inventories (December 2024, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.584 trillion (-0.2% vs. November 2024; +2.0% vs. December 2023).
- Monthly Treasury Statement (January 2025, Budget Deficit FY25 To Date): -$839.6 billion (+57.9% over comparable FY24 deficit).
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What We Learned About the U.S. Economy Last Week 