U.S. retail sales unexpectedly stalled in December, marking a significant slowdown in consumer spending that could signal economic headwinds. The Commerce Department reported that retail sales remained unchanged at 0.0% growth for the final month of 2025, falling well short of economists' projections for a 0.4% increase.

This stagnation follows a 0.6% gain in November and represents a deeper-than-anticipated deceleration in the crucial consumer spending component that drives more than two-thirds of U.S. economic output. Core retail sales, which exclude automobiles, gasoline, building materials, and food services, also remained mostly flat after a 0.4% increase the previous month, despite forecasts calling for 0.3% growth.

Analysts suggest a softening labor market may be contributing to the slowdown, though Federal Reserve officials in January characterized the jobs situation as "stabilizing." The disappointing December figures cap off a fourth quarter where consumer spending, while still robust at a 4.4% annualized expansion in Q3 GDP, appears to be losing momentum heading into 2026.