WASHINGTON (MarketWatch) — Sales at U.S. retailers fell sharply in January and the final two months of 2013 turned out weaker than initially reported, offering more evidence the economy may have softened toward the end of the year.

Sales tumbled a seasonally adjusted 0.4% last month, the Commerce Department said Thursday. Economists polled by MarketWatch had expected a 0.1% drop.

What’s more, an originally reported increase in sales in December was wiped out to show a small decline. The increase in sales in November was also trimmed a notch.

Some economists quickly cut their forecasts for first-quarter growth and said gross domestic product in the final three months of 2013 is likely to be revised sharply lower from the government’s original reading of 3.2%.

The Marketwatch estimate for first-quarter GDP now stands at 2%, down from 2.3%. And fourth-quarter GDP could be trimmed to 2.8% or less when the government issues its revised report later this month.

In Thursday action, U.S. stock markets initially retreated after the poor showing in retail sales and a separate report showing an 8,000 increase in initial jobless claims. But prices recovered by midday.

While unusually cold and snowy weather in January appeared to dim the desire of Americans to shop, the weak retail report also suggested poor conditions were not the only thing holding consumers back.

One example: Sales at Internet stores, which should not be affected much by the weather, fell 0.6% in January. That’s the largest decline since last May.

“Consumer spending appears to be on shakier ground than when the year started,” said senior economist Eugenio Aleman at Wells Fargo Securities.

January sales fell in most categories, led by a 2.1% decline in autos. Sales at U.S. auto showrooms slipped to an annual pace of 15.2 million in January from 15.3 million in December and 16.3 million in November.

Sales also declined at clothing stores, home-furnishing outlets, pharmacies and department stores.

Surprisingly, gasoline stations reported a 1.1% increase in sales at the pump, perhaps because people bought more fuel to run generators when their power was knocked out.

Grocery stores also reported higher sales. Bad weather often caused people to stay home more and cook instead of going out. Indeed, sales at bars and restaurants fell sharply for the second straight month.

Consumers are the main source of economic growth and retail sales account for a large slice of their spending. The drop in sales in January and December suggests consumers still aren’t willing to splurge, a potentially worrisome sign for businesses and the broader economy.

Companies stocked up heavily on goods in the third and fourth quarters in anticipation of stronger demand. If they can’t sell everything, they will have to reduce prices, accept lower profit margins and slow production and hiring. That would hurt first-quarter growth.

The retail report was released directly on the Internet at 8:30 a.m. because government offices were closed due to a major snowstorm.

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