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Economy in Brief

U.S. Retail Sales Gain Disappoints
by Tom Moeller  February 15, 2011

January consumer spending lost forward momentum. Retail and food service sales rose 0.3% last month after a 0.5% December increase that was revised from 0.6%. Sales have risen for seven consecutive months; however, the latest was the weakest increase. Moreover, the rise disappointed Consensus expectations for a 0.5% gain, according to the Bloomberg survey. During the last three months, sales rose at a 6.7% annual rate versus a 6.5% increase during all of last year. Excluding autos, sales rose 0.3% last month, but the gain was half expectations. The gain equaled the December rise, earlier reported at 0.5%. During the last three months, nonauto sales rose at a 6.0% rate after the 5.8% increase last year.

Motor vehicle sales rose another 0.5% and roughly matched the gain in unit sales, reported earlier this month. In addition, higher gasoline prices pulled sales of gasoline service stations up 1.4% and at a 33.4% annual rate since October. Excluding sales of autos and gasoline, retail sales rose 0.3% in January and at a reduced 3.7% annual rate during the last three months.

Discretionary spending amongst other categories was weak, perhaps due to severe Winter weather. Building material sales were the weakest and posted a 2.9% decline (+8.7% y/y) last month. Sales at furniture & home furnishing stores slipped marginally (+0.3% y/y), the third decline in the last four months, and apparel sales fell 0.3% (+3.4% y/y) after a 1.4% December drop. Sales at electronics & appliance stores rose a modest 0.3% (-0.3% y/y) after declining during four of the prior five months. Sales at general merchandise stores rose 0.8% (3.1% y/y) and reversed a 0.9% December decline. Finally, bad weather discouraged eating out and food service sales fell 0.7% (+3.3% y/y).

Again, much retail shopping was done on-line. Sales of non-store retailers jumped 1.2% in January (13.5% y/y) following several monthly increases over 1.0%. Currently, sales by electronic shopping & mail-order houses account for roughly ten percent of nonauto retail sales less building materials & gasoline.

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

Retail Spending (%) Jan Dec Nov Jan Y/Y 2010 2009 2008
Total Retail Sales & Food Services 0.3 0.5 0.8 7.8 6.5 -6.4 -1.0
  Excluding Autos 0.3 0.3 0.9 6.2 5.8 -5.1 2.3
Retail Sales 0.5 0.6 0.8 8.3 7.0 -7.1 -1.4
  Motor Vehicle & Parts 0.5 1.5 0.3 15.7 10.3 -12.1 -13.9
  Retail excluding Autos 0.5 0.4 1.0 6.6 6.5 -5.9 2.3
  Gasoline 1.4 1.8 4.1 12.0 16.2 -24.7 9.9
  Non-Auto Less Gasoline 0.3 0.1 0.5 5.7 4.8 -2.4 1.0
Food Service -0.7 -0.2 0.0 3.3 2.9 0.5 2.4
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