Retail Sales Get Lift in January
U.S. retail sales rose more in January than in any month since September, led by increased business at auto dealers, department stores and building materials outlets, government figures showed.
Sales rose 0.7% to $273.3 billion last month, following a 0.1% increase in December, the Commerce Department said. Excluding automobiles, sales rose 0.8% after no change a month earlier.
The increase suggests consumer spending may help keep intact an economic expansion that is now in its 10th year. In the fourth quarter, growth dwindled to the slowest pace in 5 1/2 years.
“The consumer is determined to keep the economy growing,” said Steven Wood, chief economist at FinancialOxygen Inc., an Internet-based financial services company. “It is extremely unlikely to have a recession when consumer spending is growing.”
Federal Reserve Chairman Alan Greenspan told lawmakers Tuesday that the economy will slow but avoid recession. Greenspan said the Fed, in its twice-yearly economic forecast, sees “a substantial slowdown, on balance, for the year as a whole.”
Still, central bankers “foresee an implicit strengthening of activity after the current rebalancing is over,” he said.
President Bush, who is pushing a $1.6-trillion tax cut as a salve for the slowing economy, said he was pleased by the retail sales gain. Even so, he cautioned, “I think it’s one good statistic amongst a sea of some pretty dismal statistics.”
The retail report appeared to be at odds with January measures of consumer sentiment that suggested Americans’ confidence in the economy was at a four-year low.
January’s retail sales gain was the largest since a 0.8% rise last September.
Analysts surveyed by Bloomberg News had expected a 0.5% increase in retail sales to $272.7 billion after a previously reported 0.1% increase in December. Tuesday’s report is a preliminary survey of sales at about 4,000 stores.
The final tally covers sales at about 13,000 businesses. Those revised January statistics will be made available when the government reports on February retail sales next month.
Tuesday’s report is good news for Fed policymakers, who reduced their benchmark lending rate a full percentage point in two separate moves last month to help keep the economy from weakening too much.
Central bankers, after reducing their overnight bank lending rate to 5.5% on Jan. 31, said in a statement that they were responding because “consumer and business confidence has eroded further.”
January’s increase in retail sales was led by a 0.6% rise in purchases at auto dealers. Sales of cars and light trucks rose to an annual pace of 17.2 million, up from the 15.5-million pace in December, industry figures showed earlier this month. That was the highest sales level since September.
Furniture store sales rose 1.5% after falling 0.9% in December, the Commerce Department report showed. Sales at building materials, hardware, garden supply and mobile home dealers rose 1.1% in January after rising 0.8% the month before.
Sales at department stores and other general merchandise stores rose 0.7% in January after a 0.4% decline in December, the Commerce Department report showed.
Sales at clothing and accessory stores rose 0.9% last month after a 0.7% increase in December. The increase may have been helped by heavy discounting as clothing retailers tried to unload leftover holiday merchandise, analysts said.
Gasoline service station sales rose 2.5% last month after falling 2.8% in December. The rise reflected higher prices.
Sales at restaurants and bars rose 1% in January after rising 0.4% a month earlier, the report said. Sales at food stores, including grocery stores, fell 0.2% after rising 0.9% in December.
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Retail Sales
In billions of dollars, seasonally adjusted:
January: $273.3 billion
Source: Commerce Department
