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.