Chrry Creek Mall, discounts, Cherry Creek Mall. Discount placards stand in the window of a shoe store as last-minute shoppers finish up their Christmas gift lists at the Cherry Creek Mall, in Denver. Retailers were offering ample discounts plus even more price cuts to those shoppers who ventured out with the holiday loomingChristmas Shoppers, Denver, USA - 24 Dec 2018

Retail sales may have picked up in January, but the gloomy holiday spending picture was even worse than initially thought.

Official figures showed Monday that retail sales ticked up slightly by 0.2 percent in January and when volatile items like fuel, motor vehicles and construction materials were excluded spending rose 1.1 percent in January, helped by a 0.8 percent increase in general merchandise stores.

However, the good news stopped there as on the measure excluding volatile goods, sales in December, the most important month of the year for retailers, were downwardly revised to reflect a drop of 2.3 percent. The Commerce Department had previously estimated a 1.7 percent monthly fall.

When the original figures were released a month ago, many economists suspected that the partial government shutdown may have meant the data was not collected properly and predicted that the figures would be upwardly revised.

Even Larry Kudlow, director of the White House’s National Economic Council, said at the time that he “wouldn’t be surprised if January was revised up because of that.”

But so far that has not materialized and the worsening December retail backdrop now means that excluding volatile items, sales expanded by just 0.5 percent on an annualized basis in the fourth quarter, the weakest performance in over five years.

What’s more, Andrew Hunter, senior U.S. economist at consultancy Capital Economics, believes that despite January’s small increase, retail sales in the first quarter will disappoint.

“Following the weak payrolls data released on Friday, this reinforces our view that the Federal Reserve will not raise interest rates at all this year. With the fiscal boost fading and the Fed’s prior tightening becoming a more serious drag, we continue to think the Fed’s next move will be to start cutting rates in early 2020,” he said.

Nevertheless, some economists continued to question the accuracy of the holiday sales numbers.

This included National Retail Federation chief economist Jack Kleinhenz, who argued that these figures remain suspect “given the reporting delays caused by the government shutdown.”

“The January rebound further calls into question the accuracy and reliability of the December data. The processing of the delayed data is still unclear, and the volatility of the figures reported is difficult to explain at this point,” he added.

Also casting doubt on the government’s data was Craig Johnson, president of Customer Growth Partners. He thinks it undercounted online sales growth in December.

“We suspect that since retailer response is only voluntary, that certain large online players are not responding,” he said.