U.S. consumer spending barely rose in January as households cut back on purchases of a range of goods, suggesting the economy started the first quarter on a softer note, according to Reuters.
The Commerce Department said Thursday that retail sales excluding automobiles, gasoline, building materials and food services edged up 0.1 percent last month after a 0.3 percent drop in December.
According to the report, the numbers fell just short of Wall Street expectations of a 0.4 percent jump in January. The soft reading could see economists trim their forecasts for first-quarter GDP growth.
The economy grew at a 2.6 percent annual pace in the fourth quarter, but inventory and trade data for December suggest growth could be revised to as low as a 1.7 percent rate.
“Overall, the tone of this report was disappointing as it points to a weak start to spending activity this year, despite the significant boost to disposable income from lower gasoline prices,” said Millan Mulraine, deputy chief economist at TD Securities in New York.