The Census Bureau reported that retail sales fell 0.4 percent in January, extending the 0.1 percent decline observed in December. A significant drop in auto sales over the past two months was a major factor, with spending on motor vehicles and parts down 1.8 percent and 2.1 percent in December and January, respectively. Indeed, if you were to exclude autos from the analysis, retail spending would have been unchanged in January.
As with so many other indicators of late, weather was likely a contributing factor. If people are not able to get to the stores to make purchases, the overall spending numbers are bound to reflect that. As a result, we have seen the year-over-year retail sales numbers decelerate, down from 4.0 percent in November to 3.5 percent in December to 2.6 percent in January.
The sector-by-sector breakdown for January was largely mixed, as you might expect given that it was flat for the broader (non-auto) market. There were increases in spending for building materials (up 1.4 percent), gasoline stations (up 1.1 percent), electronics and appliances (up 0.4 percent), and food and beverages (up 0.2 percent). But, these were essentially offset by declines for department stores (down 1.5 percent), sporting goods and hobbies (down 1.4 percent), clothing and accessories (down 0.9 percent), furniture and home furnishings (down 0.6 percent), health and personal care (down 0.6 percent), nonstore retailers (down 0.6 percent), and food services and drinking places (down 0.6 percent).
Chad Moutray is the chief economist, National Association of Manufacturers.
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