Sales for U.S. retailers remained unchanged in December as shoppers trimmed their spending during the holiday shopping season.

Retail sales totalled 735.0 billion, according to a Census Bureau report released on Tuesday, less than the consensus forecast of a 0.4% increase and far from the 0.6% gain in November.

That consumers remain cautious should not be a surprise given the turmoil in the economy.

“There were a lot of changes in consumer behaviors because of tariffs and the government shutdown,” said Tuan Nguyen, economist at RSM US LLP, referring to the historically-long government shutdown in November. 

December’s report brings what was a decent year for retail sales to a disappointing close. In 2025, total sales were up 3.7 percent, a 0.4% increase from 2024. The numbers have been seasonally adjusted, but not adjusted for inflation which means sales actually declined in real terms. Despite the holiday season and previous growth reflected in the November 2025 retail sales report, consumers pulled back on spending. 

The report also comes at a time when the December 2025 labor market saw subdued growth with 50,000 jobs added compared to 56,000 jobs in November, according to the U.S. Bureau of Labor Statistics. Unemployment rates fell to 4.4% compared to an estimate of 4.5%. These factors impacted consumer confidence in the economy.

Notably, retail trade lost 25,000 jobs in December, including in warehouse clubs, supercenters, and other general merchandise retailers. This is only a slight change from 2024, but signals that consumer demand may be reducing the need for retail employment.

However, the beginning of the new year might bring new invigoration into the economy, with economists predicting stronger retail sales numbers due to tax cuts in the One Big Beautiful Bill signed by President Trump in July. According to a statement from the White House, the average tax refund in 2025 will be $1,000 dollars or more higher than previous years. 

Also included in the statement was a graphic depicting that the average tax refund total is estimated to be $3,800 dollars, meaning Americans are expected to have more money in their pockets in the beginning of 2026. 

“Spending will probably improve once tax refunds start to hit consumers’ bank accounts, but that is unlikely to drive significantly higher spending until March,” said Thomas Simons, chief US economist at Jeffries LLC. Those familiar with the industry hope to see consumer spending boost with the promising higher-than-average tax returns.

The Federal Reserve also released a report on Tuesday that estimates that the GDP will grow to 2.3% in 2026, an increase from the estimate of 1.7% in 2025. “Looking ahead, I’m cautiously optimistic,” said Federal Reserve Bank of Cleveland President Beth M. Hammack in a speech at the 2026 Ohio Bankers League Economic Summit on Tuesday. “Growth this year should get a boost from easier financial conditions,” said Hammack.