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January retail sales rise, stabilising after December slump
US retail sales stabilised in January after a plunge the prior month that was larger than first reported, indicating that consumers may still be able to help support growth after a dismal end to 2018.
The value of overall sales rose 0.2 per cent after a 1.6 per cent decrease in the prior month, Commerce Department figures showed on Monday.
The median forecast in Bloomberg's survey called for an unchanged reading.
Sales in the "control group" subset, which some analysts view as a cleaner gauge of underlying consumer demand, rose 1.1 per cent, topping estimates after a 2.3 per cent drop in the prior month. The measure excludes food services, car dealers, building materials stores and petrol stations.
The stronger-than-expected report should ease concern about consumer strength after a surprisingly weak December that was likely hurt by the government shutdown and seasonal factors.
Months of higher wage gains, tax cuts and a robust labour market have supported spending, the largest part of the economy, and fresh strength bodes well for it to continue buoying growth in the first quarter.
Eight of 13 major retail categories showed improvement. The gains reflected the biggest jump for building materials since late 2017, the best rise for food and beverage stores since early 2016 and the strongest gain for sporting goods and hobby stores since 2013.
The spending tally, while encouraging, is still not likely to sway the Federal Reserve officials, who have said that they would pause on interest rate decisions for the near term to gauge the impact of multiple headwinds on the US economy.
Other indicators signal a weaker start to 2019, including last Friday's jobs report showing that February payrolls growth was the weakest in more than a year. Still, consumers are also the most confident about current conditions in 18 years, Conference Board data show.
Filling station receipts fell 2 per cent. The figures are not adjusted for price changes, so lower sales could reflect lower petrol costs, sales, or both. Oil prices have rallied this year from a fourth-quarter plunge.
Car dealer sales slumped 2.4 per cent, the most in five years, after a gain the previous month. Industry data from Ward's Automotive Group previously showed that US unit sales fell to a five-month low in January. Excluding cars and petrol, retail sales rose 1.2 per cent, after a 1.6 per cent drop the previous month.
While the report was delayed by the government shutdown, the Census Bureau said that response rates were at or above normal levels for the January data.
Estimates in the Bloomberg survey ranged from a 0.9 per cent decline to a one per cent gain.
Sales at non-store retailers rose 2.6 per cent for the best gain in more than a year.
The retail sales data capture just under half of all household purchases, and tend to be volatile. Personal spending figures, due at the end of the month for January, provide a fuller view of consumption. BLOOMBERG