US retail sales rise in January, Latest World News - The New Paper

US retail sales rise in January

This article is more than 12 months old

WASHINGTON US retail sales unexpectedly rose in January, lifted by an increase in purchases of building materials and discretionary spending.

But receipts in December were much weaker than initially thought.

The report from the Commerce Department yesterday is welcome news for the economy after a raft of weak December data, as well as a sharp moderation in the pace of job growth last month.

Still, the relatively strong retail sales report will probably not change expectations for a sharp slowdown in economic growth in the first quarter.

Retail sales rose 0.2 per cent. Data for December was revised down to show retail sales dropping 1.6 per cent instead of tumbling 1.2 per cent as previously reported.

The drop in December was the biggest since September 2009, when the economy was emerging from recession.

Economists polled by Reuters had forecast retail sales to be unchanged in January.

Sales in January increased 2.3 per cent from a year ago.

The January retail sales report was delayed by a 35-day partial shutdown of the federal government that ended on Jan 25.

Excluding automobiles, gasoline, building materials and food services, retail sales rebounded 1.1 per cent in January after a downwardly revised 2.3 per cent plunge in December.

The government reported last month that the economy grew at a 2.6 per cent annualised rate in the last three months of last year.

But December reports on the trade deficit and construction spending have led economists to believe the fourth-quarter gross domestic product estimate would be revised lower when the government publishes its revision later this month.

Growth estimates for the first quarter are below a 1.5 per cent pace.

The government reported last Friday that the economy created only 20,000 jobs last month, the fewest in nearly 11/2 years.

In January, online and mail-order retail sales increased 2.6 per cent, the biggest gain since December 2017.

Sales at building material stores increased 3.3 per cent, the most since September 2017. But receipts at auto dealerships tumbled 2.4 per cent in January, the largest drop since January 2014, after gaining 0.3 per cent in the prior month. - REUTERS