U.S. retail sales unexpectedly stalled in December, defying forecasts for modest growth and intensifying worries about consumer spending momentum. The Commerce Department reported no change in retail sales last month, following a downwardly revised 0.4% increase in November. Economists had projected a 0.3% rise, making the flat reading a notable surprise.

Several sectors showed weakness, with online retailers and department stores experiencing declines. This softness comes amid persistent inflation and high interest rates that have eroded household purchasing power. The data suggests consumers may be pulling back after a year of resilient spending, potentially signaling a broader economic slowdown.

The weaker-than-expected performance raises questions about the consumer economy's durability heading into 2024. With the Federal Reserve closely monitoring spending data as it considers future interest rate decisions, this disappointing report could influence monetary policy discussions in the months ahead.