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Economy in Brief

U.S. Retail Sales Surged As Temperatures Warmed 
by Tom Moeller February 14, 2006

January US retail sales surged 2.3% as temperatures posted record highs. The increase by far exceeded Consensus expectations for a 0.8% gain and the December increase was revised down to 0.4% due to a lowered estimate of auto sales.

Unseasonably warm temperatures in the U.S. last month were evident in the record low number (662) of heating degree days which were down 22% from the warm January 2005.

Sales by motor vehicle & parts dealers rose 2.9% (4.9% y/y) and the increase about matched the 2.7% m/m rise in unit auto sales.

Discretionary spending surged as consumers went shopping. Apparel store sales jumped 4.2% (10.0% y/y) following marginal declines during the prior two months. General merchandise store sales surged 2.1% (7.4% y/y) after no change in December and sales of furniture, electronics & appliances recovered 2.9% (7.9% y/y) after a downwardly revised 1.0% December decline.

Building material sales certainly benefited from the mild weather and jumped 3.4% (14.7% y/y).

Sales at gasoline stations rebounded following three consecutive months of decline. The 5.5% rise, however, lagged the 6.0% m/m recovery in gasoline prices. In February, gasoline prices have averaged about the same level as during January.

Less gasoline, nonauto retail sales spiked 1.8% (8.3% y/y) and the December increase was revised up to 0.3%.

Sales of nonstore retailers (internet & catalogue) dropped 2.6% (8.3% y/y).

  Jan Dec Y/Y 2005 2004 2003
Retail Sales & Food Services 2.3% 0.4% 8.8% 7.5% 7.3% 4.3%
  Excluding Autos 2.2% 0.2% 9.9% 8.6% 8.2% 4.7%
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