Retail sales slipped more than Wall Street expected in January, raising questions of whether America's resilient consumer could be losing steam.

Retail sales fell 0.8% in January from the month prior, according to Census Bureau data. Economists had expected a 0.2% decrease in spending, according to Bloomberg data. December retail sales previously posted a surprise 0.6% increase, but that was revised down to 0.4% in Thursday's release.

The month-over-month decline in January was the largest since March 2023.

Nationwide chief economist Kathy Bostjancic pointed out that seasonal adjustments and inclement weather during January were likely a drag on sales during the month. But the overall trend of a slowing consumer is something economists have been waiting for.

"We have expected consumers to [rein] in their spending this year after drawing down the pandemic-related savings, driving the savings rate well below its pre-pandemic levels, and increasing their reliance on credit," Bostjancic wrote in a note to clients.

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January sales, excluding auto and gas, decreased by 0.5% compared to estimates for a 0.2% increase.

Nine of the 13 categories highlighted in the release saw decreases from a month ago. Building materials and garden equipment led the declines, dropping 4.1%, while sales at miscellaneous store retailers fell 3%.

Meanwhile, sales at furniture and home stores led the gains, rising 1.5% from the month prior.

The January report was expected to be closely watched by investors looking for signs of a "soft landing" in the US economy, where inflation cools to the Fed Reserve's targeted 2% rate without an extreme downturn in economic activity.

It was the second economic data point released this week that challenged the prospects of that scenario. On Tuesday, the latest Consumer Price Index (CPI) report showed prices increased 3.1% in January, more than the 2.9% increase economists had expected, calling into question whether inflation is on a steady path downward to the Fed's 2% target.

In an interview with Yahoo Finance, Allianz chief economic advisor Mohamed El-Erian cautioned against reading too far into one print but noted the retail sales number could be more concerning than the inflation reading to the extent that it reflects a weakening economy.

"US exceptionalism has been based on the ability to continue to grow and growth powered by the household sector and powered by retail sales," El-Erian said. "That is why we have outperformed other economies. That is why our stock market has done so well. It's the ability to grow."