U.S. retail sales dropped by the most in nearly two years in January, likely because of frigid temperatures and moderation following hefty gains in the past four months, suggesting a sharp slowdown in economic growth early in the first quarter.

With consumer spending making up two-thirds of economic activity in the U.S., the sales numbers indicate potentially weaker growth for the first quarter.

U.S. retail sales surged 4.8% year-over-year in January, rising to $668 billion, setting the stage for unexpectedly strong retail growth in 2025.