Retail Sales Dropped 0.9% in January

Retail sales fell 0.9% in January, their second straight monthly decline, pulled down in large part by plunging auto sales, the government said today.

The Commerce Department said sales totaled a seasonally adjusted $148.2 billion, down from $149.6 billion in December, when sales dropped 1.5%--even worse than the 0.4% first reported last month.

January traditionally is the slowest month of the year for retailers as consumers take a break after running up bills during the Christmas shopping season.

But analysts said January purchases were even slower this year because of the recession and the outbreak of war on Jan. 17.

Indeed, January sales were down 1.4% from purchases during the same month of 1990.

It was the government’s first report on consumer activity in 1991. Retail sales, which grew an anemic 3.8% last year, represent about half of total consumer spending. Consumer spending, in turn, accounts for two-thirds of the nation’s economic activity.

Auto sales fell 4.4% after an identical 4.4% decline in December. That figure was revised downward from the 1.4% estimated drop first reported.

Excluding the auto category, retail sales were unchanged.

Overall, sales of durable goods--items such as cars that are expected to last more than three years--declined 2.8% after falling 3.4% in December.

All categories posted decreases. Sales of building materials were down 0.9% after plummeting 4.2% a month earlier. Furniture and other home furnishings sales were off 0.4% after a 1.4% drop the previous month.

Sales of non-durable goods, such as food and clothing, rose 0.1% on top of a 0.4% decline in December.

Department store sales increased 0.8% but failed to recoup from a 1.1% drop in December during the holiday shopping season. Apparel purchases were unchanged after falling 0.9% a month earlier.

Grocery store sales were up 0.4% after a 0.2% gain a month earlier. Sales at restaurants and bars were up 0.8%.