Retail Sales Disappoint Again in January

Retail sales in January were weaker than expected. Spending on U.S. retail and food services fell by 0.8% last month following a decline of 0.9% in December.

In January, six of the thirteen major sales categories posted a decline in sales over the month. Once again, the largest drop occurred at gasoline stations where sales fell by 9.3% because of lower fuel prices. If gasoline sales are excluded from the total January figure, retail sales were up by 0.2%.

However, it was not only gasoline sales that were weak in January. Sporting goods, hobby, book and music stores saw sales fall by 2.6%; sales at apparel and accessory retailers were off by 0.8%; furniture and home furnishings sales fell by 0.7%; sales at motor vehicles and parts dealers declined by 0.5%; and sales at food and beverage stores dipped by 0.3%.

Sectors that recorded an increase in January were miscellaneous store retailers (2.6%); restaurants and bars (0.8%); building material and garden supply centers (0.6%); nonstore retailers (0.5%); electronics and appliance stores (0.3%); health and personal care stores (0.2%); and general merchandise stores (0.1%).

On a year-over-year basis, total retail sales in January were up by 3.3%. Every major sector posted a gain over the last 12 months except for gasoline stations, which saw sales plummet by 23.5%. Again, if we were to remove gasoline sales from the mix, the year-over gain would have been 5.2%, the strongest year-over-year growth rate in nearly three years. The largest year-over gains were posted by restaurants and bars (11.3%); motor vehicles and parts (10.0%); and non-store (mostly e-commerce) retailers (8.3%).

So far, lower gasoline prices do not appear to be translating into increased spending in other retail sectors. One reason for this may be that consumers are diverting a greater share of their earnings into savings, or spending more on things like housing or health care. Still, prospects for the retail sector look good. Buoyed by a strong job market and lower gasoline prices, we can expect to see stronger retail sales winter fades and spring approaches.  

Source:  http://www.census.gov/retail/marts/www/marts_current.pdf