As we detailed in our preview for premium subscribers, if the omniscient analyst at BofA is right this morning, the fecal matter is about to hit the rotating object as they saw retail sales declining bigly (more than expected) in January judging by real-time credit card spending data...

Source: BofA

After they unexpectedly surged in November and December (driven in large part by a jump in Food Services), headline retail sales in January were expected to decline just 0.2%, but BofA nailed it once again with a large 0.8% MoM drop. That dragged the YoY retail sales down to just 0.6%...

Source: Bloomberg

That is the worst monthly decline since March 2023 and worst YoY rise since May 2020.

It wasn't pretty...

Motor Vehicles and Parts and Building Materials saw the largest decline MoM...

Source: Bloomberg

On a YoY NSA basis, Gas Stations and Building Materials were the biggest drag, while online retailers and Food Services were the biggest upside drivers...

Source: Bloomberg

Core Retail Sales also declined (-0.5% MoM vs +0.2% exp), which dragged the YoY levels down to their lowest since the COVID lockdowns...

Source: Bloomberg

Adjusted (crudely) for inflation, this was a huge drop in 'real' retail sales...

Source: Bloomberg

Finally, the control group - used to feed through to the GDP calculation - tumbled 0.4% MoM (vs expectations of +0.2%).

Soft-landing morphing into a stagflationary crash-landing?

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