Retail Sales Have Grown Sharply Over the Past Year

The Census Bureau said that retail sales rose 0.4 percent in January, extending the 1.0 percent gain seen in December. It was the fifth consecutive monthly increase in retail spending, illustrating once again that Americans have been willing to open their pocketbooks after being more cautious with their purchases at this time last year. Indeed, over the past 12 months, retail sales have jumped 5.6 percent, a healthy rebound from a year-over-year pace of just 2.2 percent in August. Motor vehicles and parts sales have been a relative bright spot of late, but the January data were held back somewhat by a 1.4 percent decline in auto sales. To be fair, this drop was likely a response to a larger-than-normal jump in December in motor vehicle purchases, up 3.2 percent. Excluding automobiles, retail sales rose 0.8 percent in January, with year-over-year growth of 5.3 percent.

Beyond motor vehicles, retail spending in January was mostly higher. Retail segments with increased spending for the month included gasoline stations (up 2.3 percent), sporting goods and hobby stores (up 1.8 percent), electronics and appliance stores (up 1.6 percent), food services and drinking places (up 1.4 percent), clothing and clothing accessory stores (up 1.0 percent) and general merchandise stores (up 0.9 percent), among others. In contrast, miscellaneous store retailers experienced a 0.2 percent decrease in sales in January, with flat spending for furniture and home furnishings stores and nonstore retailers.

Since January 2016, the largest gains in retail spending were for gasoline stations (up 14.2 percent), nonstore retailers (up 12.0 percent), health and personal care stores (up 8.5 percent), motor vehicle and parts dealers (up 6.8 percent), food services and drinking places (up 5.6 percent) and miscellaneous store retailers (up 4.1 percent). The gasoline station increase stemmed largely from higher prices. To illustrate this, the average price of regular conventional gasoline grew from $1.75 per gallon on January 25, 2016 to $2.33 a gallon on January 9, 2017, according to the Energy Information Administration.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM), where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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