January Sales, Excluding Autos, Beat Expectations

Americans filled their shopping baskets in January, undaunted by economic and geopolitical uncertainties, as retail sales outside the auto sector posted their biggest rise in more than two years.

Separate government data released Thursday showed that the ranks of people seeking first-time jobless benefits thinned last week, a small ray of hope for the gloomy labor market.

“I think we’re pulling out of this soft period we had in the fourth quarter,” said Henry Willmore, chief U.S. economist at Barclays Capital in New York. “I think there are some signs that things are picking up.”

Retail sales for January fell 0.9%, pulled down by a sharp drop in demand for cars as automakers cut back on financial incentives, the Commerce Department said.

However, excluding motor vehicles and parts, sales surged 1.3% -- the largest increase since a matching gain in September 2000 and far ahead of expectations of a 0.5% rise.

Consumers flocked to building material and gardening equipment stores, where sales climbed 2.9%.

There also was solid demand at food and beverage stores and at health and personal-care outlets as well. Sales at clothing and accessories stores rose a modest 0.3%.

A separate Labor Department report showed that initial claims for unemployment aid fell by 18,000 to a seasonally adjusted 377,000 for the week ended Feb. 8. Wall Street economists had expected claims to dip to 389,000 from the 391,000 originally reported for the previous week.

On the inflation front, the Labor Department said import prices in January rose sharply. But that was largely because of a 12.4% rise in the price of petroleum imports.

The threat of war in the Middle East and a cut in Venezuelan oil output due to a workers’ strike there have driven oil prices up more than 30% since the end of November.