U.S. Retail Sales Recover From Yearend Blues

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.