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Economy in Brief

U.S. Retail Sales Edge Higher
by Tom Moeller  March 11, 2019

Consumers remain in a cautious mood. Total retail sales improved just 0.2% during January (+2.6% y/y) after pulling back spending by 1.6% in December, revised from -1.2%. A 0.1% uptick had been expected in the Action Economics Forecast Survey.

Lower sales of motor vehicle sector depressed last months' gain with a 2.4% decline (+0.5% y/y) after two months of 0.3% improvement. As reported earlier, unit sales of motor vehicles fell 4.8% during January. Excluding motor vehicles and parts, retail sales rose 0.9% following a 2.1% drop. A 0.5% rise had been expected.

A measure of the underlying pace of retail spending is nonauto sales growth excluding gasoline and building materials. These sales rebounded 1.1% (2.9% y/y) after a little-revised 1.1% rise.

The improvement in sales last month was led by a 4.8% surge (-6.2% y/y in sporting goods, hobby shop, book & music store sales after falling sharply in each of the prior nine months. Sales of building material stores jumped 3.3% (10.4% y/y) after a 0.5% dip. Online retail sales jumped 2.6% (6.3% y/y), making up half of the prior month's drop. General merchandise store sales improved 0.8% (3.2% y/y) following a 1.5% decline. To the downside were sales of clothing & accessory stores which dropped 1.3% (+2.1% y/y) and repeated December's fall. Furniture & home furnishings stores fell 1.2% (-2.5% y/y), down for the fourth straight month. Sales at electronics and appliance stores eased 0.3% (-3.2% y/y) and have been lackluster for seven straight months.

Reflecting lower prices, gasoline service station sales declined 2.0% (-3.8% y/y) after weakening in three of the prior four months.

Sales of nondiscretionary items improved last month as health & personal care product store sales recovered 1.6% (2.4% y/y) after a 3.3% decline. Food & beverage store sales rebounded 1.1% (4.0% y/y) following a 0.3% easing.

Restaurant & drinking establishment sales recovered 0.7% (5.7% y/y) after a 0.1% uptick.

The retail sales data can be found in Haver's USECON database. The Action Economics forecast is in the AS1REPNA database.

Retail Spending (% chg) Jan Dec Nov Jan Y/Y 2018 2017 2016
Total Retail Sales & Food Services 0.2 -1.6 -0.0 2.6 4.9 4.3 3.1
  Excluding Autos 0.9 -2.1 -0.1 3.2 5.4 4.3 2.7
Retail Sales 0.2 -1.8 0.0 2.7 4.8 4.5 2.8
  Motor Vehicle & Parts -2.4 0.3 0.3 0.5 2.9 4.3 4.6
 Retail Less Autos 0.9 -2.5 -0.0 2.7 5.3 4.5 2.2
  Gasoline Stations -2.0 -5.7 -4.2 -3.8 13.0 8.8 -5.7
Food Service & Drinking Places Sales 0.7 0.1 -0.4 5.7 6.0 2.7 5.6
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