US retail sales up a modest 0.3% in January


US retail sales up a modest 0.3% in January

Sunday, February 16, 2020

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WASHINGTON (AP) — US retail sales rose a modest 0.3 per cent in January, a slight improvement over December, as unseasonably warm weather boosted sales at hardware stores and furniture stores.

The Commerce Department said Friday (February 14) that the January advance followed a 0.2 per cent rise in sales in December.

The slight January gain was in line with expectations. However, economists were also expecting to see a solid gain in an underlying control group of retail sales which feeds into the government's calculations for overall economic growth.

Instead, sales in the control group showed no gain at all in January and the December performance was revised down to show a gain of just 0.2 per cent slower than the 0.5 per cent rise initially reported.

Consumer spending accounts for about two-thirds of economic growth and economists are counting on consumers to remain strong to offset weakness in other areas of the economy such as trade and business investment.

The overall economy grew at a 2.1 per cent rate in the fourth quarter but consumer spending slowed sharply to a 1.8 per cent growth rate, down from gains of 3.2 per cent in the third quarter and a sizzling 4.8 per cent rise in the second quarter.

For January, auto sales edged up a slight 0.2 per cent, rebounding from a 1.7 per cent plunge in December.

Excluding the volatile auto sector, retail sales would have risen 0.3 per cent January, just half the 0.6 per cent gain in the ex-auto category in December.

Part of the January weakness reflected falling gasoline prices which resulted in a 0.5 per cent decline in sales at gasoline stations after a 1.7 per cent increase in December.

Sales at furniture stores shot up 0.6 per cent, rebounding from a 1.6 per cent decline in December. Sales at hardware and other building supply stores surged 2.1per cent, building on a strong 1.3 per cent gain in December.

Sales at general merchandise stores, a category which includes department stores and big retail chains such as Target and Walmart, rose a solid 0.5 per cent in January, up from a 0.4 per cent December increase. The performance in the department store category alone was not as impressive, showing a tiny increase of 0.1 per cent in January following a 0.6% decline in December.

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