The Census Bureau reported that retail sales grew 0.4 percent in January, reversing the flat sales experienced in December. Auto sales, however, fell by 1.1 percent, bringing down the overall increase. Excluding autos, retail sales rose 0.7 percent – a growth rate not seen since last March. This is yet further evidence that Americans have started spending again, even as consumer sentiment surveys show continued anxieties.
Areas of strong growth in January included general merchandisers (up 2 percent), gas stations (up 1.4 percent), grocery stores (up 1.3 percent) and sporting goods and hobbies (up 1.1 percent). Higher gasoline prices led to the increase in sales at service stations.
The auto segment, which was down in January, is still up 7.3 percent year-over-year. Motor vehicle sales, in general, have been one of the bright spots among manufacturers. In addition to autos, other sectors with weaker sales in January included nonstore retailers (down 1.1 percent) and furniture and home furnishings (down 0.2 percent).
Overall, “core” retail sales – which excludes automobiles and gasoline – rose 0.6 percent for the month or 5.2 percent since January 2011. This is a slower pace than the 6.6 percent growth rate found six months ago, suggesting consumers have eased off of their spending somewhat lately. Yet, it also shows continued modest gains in purchases, and January’s numbers were an improvement from the weak holiday sales of December.
Chad Moutray is chief economist, National Association of Manufacturers.