Retail spending declined by 0.3 percent in January, which was a disappointing, especially given the consensus expectation for a 0.2 percent increase. Moreover, retail sales were unchanged in December, a notable revision from the prior estimate of a 0.4 percent gain. As a result of these latest figures, it is clear that consumer spending has been softer in the past two months than we would prefer. Yet, the larger narrative remains an encouraging one, with consumers being a bright spot over the past year. Indeed, retail sales have risen 3.7 percent year-over-year in January, suggesting a decent pace overall even if it represented a deceleration from the more-robust rate of 5.2 percent in December. Excluding automobiles, the pace was even stronger, with retail sales up 4.2 percent over the past 12 months.
Retail spending data were mixed in January. The largest increases were seen in the following categories: gasoline stations (up 1.6 percent), miscellaneous store retailers (up 1.6 percent), clothing and accessory stores (up 1.2 percent), department stores (up 0.8 percent) and electronics and appliance stores (up 0.5 percent). Gasoline station sales were boosted by higher prices. In contrast, there were reduced monthly sales for building materials and garden supply stores (down 2.4 percent), motor vehicles and parts (down 1.3 percent), health and personal care stores (down 1.2 percent), sporting goods and hobby stores (down 0.8 percent) and furniture and home furnishing stores (down 0.4 percent). At the same time, spending at food and beverage stores, food services and drinking places and nonstore retailers was unchanged in January.
Over the past 12 months, the fastest growth in retail sales were in the following segments: nonstore retailers (up 10.2 percent), gasoline stations (up 9.0 percent), furniture and home furnishings stores (up 4.7 percent), miscellaneous store retailers (up 4.6 percent), building material and garden supply stores (up 3.6 percent) and food and beverage stores (up 3.6 percent).