Online retailers saw biggest advance since February as retail sales increased for third straight month.
The latest figures are in and they demonstrate that retail sales increased for the third straight month in January with a 0.2 percent gain overall and an 1.6 percent gain for online retailers, marking the biggest advance since February, according to Bloomberg. Sales at general merchandise outlets also rose 0.8 percent, showing the largest increase since May.
The data comes from the U.S. Commerce Department monthly sales report released February 12.
Sales excluding automobiles, gasoline, building materials and food services rose 0.6 percent last month, beating expectations that ranged from a decline of 0.5 percent to a 0.4 percent rise, thanks to lower fuel prices that undercut gasoline sales although winter weather kept consumers eating in.
Meanwhile, apparel sales rose 0.2 percent, electronics and appliance sales rose 0.1 percent, while sporting goods and hobby stores sales dropped 2.1 percent. General merchandise sales grew 0.8 percent, the most since May, and online sales grew 1.6 percent, according to the Commerce Department figures.
"Despite all of the turmoil in financial markets and growing chatter about recession, consumer spending, the economy's backbone, continues to move higher," wrote PNC senior economist Gus Faucher. "Sales growth in January was solid, especially after taking into account the big drop in gasoline prices over the month, and growth in December was revised up."
Greater job security, improving wage growth, and lower gas prices seem to be encouraging more spending by consumers after the 4th quarter slowdown. “Consumer fundamentals still look very strong,” BNP Paribas economist Bricklin Dwyer told Bloomberg. “We had really strong real incomes at the end of last year, and that’s going to feed through to consumption.”
Apparel sales last month likely got a bump as retailers were finally able to sell some of that winter gear that sat on racks during the warm holiday season, though, as expected, the month’s winter storm kept people out of restaurants and bars.
Paul Ashworth, Chief U.S. Economist at Capital Economics, told the Tri-County Sun Times: "All things considered, it appears that the net impact of the record wet AND warm weather in December was negative, with a clear rebound in January as the weather returned to more seasonal norms.”
"Note too that the strength of sales in January came despite the massive snowstorm that blanketed much of the east coast for an entire weekend", he added.
