Today's Paper Search Latest Coronavirus Elections Core values App Listen Story ideas iPad Weather Newsletters Obits Puzzles Archive
story.lead_photo.caption Flower shop owner Billie Jo Brito in Lewiston, Maine, gets ready earlier this week for Valentine’s Day sales. Retail sales for December were revised downwardly to a 0.2% increase, the Commerce Department said Friday. (AP/Sun Journal/Russ Dillingham)

WASHINGTON -- U.S. retail sales rose a modest 0.3% in January, a slight improvement over December, as unseasonably warm weather boosted sales at hardware and furniture stores.

The Commerce Department said Friday that the January advance followed a 0.2% rise in sales in December.

The slight January gain was in line with expectations. However, economists were also expecting to see a solid gain in an underlying control group of retail sales that feeds into the government's calculations for overall economic growth.

Instead, sales in the control group showed no gain at all in January and the December performance was revised to show a gain of just 0.2%, slower than the 0.5% rise initially reported.

Economists said the weakness in underlying retail sales was disappointing but is likely to be temporary given a number of factors expected to support consumer spending in coming months.

"With jobs growth solid and consumer confidence resilient, we doubt this weakness will persist," said Andrew Hunter, senior U.S. economist at Capital Economics.

Consumer spending accounts for about two-thirds of economic growth, and economists are counting on consumers to remain strong to offset weakness in other areas of the economy such as trade and business investment.

Resilient hiring and wage growth are helping boost sentiment and keep spending steady. Economists forecast household outlays to increase in the first quarter at about the same pace as the end of 2019.

Meanwhile, economic risks remain with sluggish export markets, weak business spending and any fallout from the coronavirus.

The overall economy grew at a 2.1% rate in the fourth quarter, but consumer spending slowed sharply to a 1.8% growth rate, down from gains of 3.2% in the third quarter and a sizzling 4.8% in the second quarter.

For January, auto sales edged up a slight 0.2%, rebounding from a 1.7% plunge in December.

Excluding the volatile auto sector, retail sales would have risen 0.3% in January, just half the 0.6% gain in December.

Part of the January weakness reflected falling gasoline prices, which resulted in a 0.5% decline in sales at gas stations after a 1.7% increase in December. Consumer price index data Thursday showed gasoline costs fell 1.6% last month.

Sales at furniture stores shot up 0.6%, rebounding from a 1.6% decline in December. Sales at hardware and other building supply stores surged 2.1%, building on a strong 1.3% gain in December.

Sales at general merchandise stores, a category that includes department stores and big retail chains such as Target and Walmart, rose a solid 0.5% in January, up from a 0.4% December increase. The performance in the department store category alone was not as impressive, showing a tiny increase of 0.1% in January following a 0.6% decline in December.

Sales retreated at electronics outlets, clothing stores and personal care shops.

Sales at non-store retailers, a category that covers online sales, rose 0.3% in January after falling 0.1% in December.

Information for this article was contributed by Martin Crutsinger of The Associated Press and by Katia Dmitrieva and Jordan Yadoo of Bloomberg News.

Business on 02/15/2020

Print Headline: Retail sales inch up in January


Sponsor Content

COMMENTS - It looks like you're using Internet Explorer, which isn't compatible with the Democrat-Gazette commenting system. You can join the discussion by using another browser, like Firefox or Google Chrome.
It looks like you're using Microsoft Edge. The Democrat-Gazette commenting system is more compatible with Firefox and Google Chrome.