After improving in December, real household spending fell -4.5% MoM (vs -1.9% MoM expected), and the annual growth rate eased to 0.8% YoY in January, down from 2.7% YoY and below expectations of an acceleration to 3.6% YoY.

• Real income flipped from moderate growth of 2.9% YoY in December to a decline of -1.1% YoY, the first drop since September 2024.
• A major divergence developed in goods and services spending with the former down -2.7% YoY and the latter surging to an increase of 6.7% YoY, the largest annual increase in real spending on services in over two years.