United States: Retail sales rebound marginally in January
March 11, 2019
Nominal retail sales rose 0.2% on a seasonally-adjusted month-on-month basis in January, recovering marginally from December’s downwardly revised 1.6% sharp plunge (previously reported: -1.2% month-on-month), and mildly beating market expectations of a flat print. Nevertheless, retail sales excluding automobiles, gasoline, building materials and food services—also known as “core” retail sales as they most closely reflect private consumption in GDP—rebounded 1.1% in January (December: -2.3% month-on-month). January’s result suggests consumer spending likely hit a soft patch in the first quarter of the year, and coupled with other recently-released weak data, including February’s feeble job growth, point to a cooling economy. Nevertheless, retail sales could still pick up in the months ahead, boosted by individual tax returns.
The recovery in January came on the back of increased consumer spending across the majority of categories such as food and beverage, and health and personal care sales, as well as spending at brick-and-mortar stores. Moreover, non-store retail sales, which includes online shopping, also recovered notably in the month after falling to an over-decade low in December. Nevertheless, the headline print was significantly dragged on by the steepest contraction in motor vehicle and parts sales in five years, and contractions, albeit softer ones, in spending at gasoline stations, and clothing and accessories stores.
In annual terms, growth in retail sales came in at 2.3% in January, up from the revised 1.6% increase recorded in December (previously reported: +2.3% year-on-year). Lastly, annual average retail sales growth fell to 4.7% in January from 4.9% in December.
Author: Lindsey Ice, Economist