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Economy in Brief

U.S. Retail Sales Recover Modestly Following Six Months of Decline
by Tom Moeller February 12, 2009

January retail sales unexpectedly rose 1.0%. However, the increase recovered only part of the little-revised 3.0% decline during December which capped a six-month slide in sales. The meekness of the rebound left the 9.7% year-to-year decline as the postwar record and it followed declines of 3.0%, 2.4% and 3.4% during the prior three months. Consensus expectations had been for a decline of 0.8% decline in January sales. The retail sales data are available in Haver's USECON database.

A surprising 1.8% rise in motor vehicle sales accounted for part of the recovery in overall retail sales last month. The gain contrasted with the already reported 7.1% decline in unit sales of light vehicles. Gasoline service station sales also rose a surprising 2.6% which was boosted by the seasonal factor. Excluding these two areas, retail sales rose 0.8% after a 1.8% December decline. Year-to-year, excluding autos and gasoline, sales fell 2.0% which also was a record.

Sales at gasoline service stations rose 2.6% (-35.5% y/y) after a 15.6% decline during December. The rise was fueled (pardon the pun) by a 5.5% month-to-month rise in the pump price for gasoline.Gas prices are up another 6.6% so far in February.

Modest rebounds in retail sales were widely evident throughout the latest report. Sales at furniture and electronics & appliance stores recovered 0.7% after the huge 3.8% December decline. That left sales down 11.1% year-to-year. Furniture store sales fell 1.3% and by 14.3% year-to-year while sales of electronics & appliances rose 2.6% (-7.8% y/y) after a downwardly revised 5.8% December decline.

In the soft goods area, apparel store sales recovered 1.6% (-10.3% y/y) after their 4.0% December drop which was downwardly revised. At general merchandise stores, sales rose 1.1% (1.5% y/y) and recovered all of their December decline.

Dining out was a bit more in vogue and it registered a 0.8% recovery after the 1.3% December decline. The 1.8% year-to-year increase, however, remained one-half of the 2008 pace and down sharply from the 5%-to-6% gains of the prior several years.

Building materials sales continue to tumble with the drop off in housing. Sales fell 3.2% last month (-12.1% y/y) and the drop was similar in size to the declines of the prior three months and it was the sixth consecutive tumble.

Sales at nonstore (internet) retailers made up their December decline with a 2.7% (0.1% y/y) increase. That followed six consecutive months of decline.

  January December November Y/Y 2008 2007 2006
Retail Sales & Food Services (%) 1.0 -3.0 -2.4 -9.7 -0.5 4.2 5.8
  Excluding Autos 0.9 -3.2 -2.6 -6.6 2.7 4.6 6.8
    Less Gasoline 0.8 -1.8 -0.3 -2.0 1.8 4.2 6.2
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