Retail sales for the country started off in low gear during January, hitting their slowest pace in three months.
The U.S. Commerce Department this week reported a 0.1% increase from December’s level. Excluding sales of new autos, the increase was 0.2%. This follows a 0.5% gain in December compared to November.
For all of 2012, retail sales increased 4.1% last year versus 2011.
Some analysts were expecting January’s performance, blaming the expiration of a temporary cut in the Social Security tax that hiked the payroll deduction from 4.2% to 6.2% and took an estimated $9 billion dollars out of the economy. Adding to this, consumers were hit with higher fuel prices in January.
Consumer spending accounts for about 70% of all U.S. economic activity. This report, along with other recent ones, has many economists predicting slow growth for the U.S. economy this year of 2.3% compared to 2012, according to a poll by Reuters.