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Economy in Brief

U.S. Retail Sales Recover From Yearend Blues
by Tom Moeller February 12, 2010

Shoppers are returning to stores after restraining spending at yearend. January retail sales increased 0.5% after a 0.1% decline during December which was less than reported initially. The latest figure was firmer than Consensus expectations for a 0.3% rise. Moreover, the rebound had nothing to do with shopping for a motor vehicle. Retail sales less autos rose 0.6% after a 0.2% slip in December that was slightly less than reported last month. As apparent in earlier figures, the trend in retail spending has improved. On a three-month basis retail sales rose at a 9.7% annual rate through January versus the 15.8% rate of decline one year ago. Less autos, spending growth also recovered on a three-month basis to 10.1% from -17.9% one year ago. 

Internet & catalogue sales continued strong. They posted a 1.6% rise in January (12.4% y/y) following similarly strong increases during the prior four months. The three-month rate of gain rose to 28.5% from -9.7% one year ago. 

"Core" discretionary spending also improved as general merchandise store sales rose 1.5% (3.2% y/y) and recovered a 1.1% December decline. Sales of electronics & appliances were strong as well and posted a 1.2% gain but remained down 7.0% from last January. Earlier weakness in clothing & accessory stores also stabilized and rose 0.3%, however, price discounting left the y/y gain at just 0.3%. Furniture & home furnishing store sales have yet to recover much. A 1.4% January decline (-4.4% y/y) left the three-month annualized growth rate at a negative 1.3%. That was, however, improved from -21.6% at its worst. 

Motor vehicle sales were unchanged last month (5.5% y/y) but that was better than the 4.2% m/m decline in unit sales. Higher gasoline prices played a part in the retail sales picture. Gasoline purchases, however, ticked up just 0.4% (29.0% y/y) even though prices rose 4.0% (50.5% y/y). Sales of building materials fell 1.2% (-6.3% y/y).

The retail sales data are available in Haver's USECON database.  

  January December November Y/Y 2009 2008 2007
Total Retail Sales & Food Services (%) 0.5 -0.1 2.0 4.7 -6.0 -0.8 3.3
  Excluding Autos 0.6 -0.2 2.0 4.6 -4.7 2.4 3.9
    Non-Auto Less Gasoline 0.6 -0.3 1.1 2.0 -1.9 1.6 3.6
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