Retail Sales Show Modest Increase In January

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Retail sales increased in line with economist estimates in the month of January, according to a report released by the Commerce Department on Friday, with the report also showing a smaller than previously reported drop in December sales.

The report showed that retail sales increased by 0.5 percent in January following a revised 0.1 percent decrease in December. Economists had been expecting sales to increase by 0.5 percent compared to the 0.3 percent decrease originally reported for the previous month.

A rebound in sales at electronics and appliance stores contributed the increase in total sales, with sales at the stores increasing by 1.2 percent in January following a 3.5 percent drop in December.

Sales at general merchandise stores, non-store retailers, and sporting goods, hobby, book and music stores also showed notable increases.

However, the sales growth was partly offset by significant decreases in sales by furniture and home furnishing stores, building material and garden supplies dealers, and miscellaneous store retailers.

The report also showed that sales by motor vehicle and parts dealers were flat in January following a 0.1 percent increase in December.

Excluding auto sales, retail sales increased by 0.6 percent in January compared to a 0.2 percent decrease in the previous month. The increase in ex-auto sales came in slightly above economist expectations for 0.5 percent growth.

Rob Carnell, chief international economist at ING, said, "On balance, this was not a bad result for January sales, though it falls far short of a convincing display of consumer demand strength."

"[First quarter 2010] consumer spending will have to build on these figures if it is to achieve the 2.0% or so growth we are currently forecasting," he added. "And that is far from in the bag."

The Labor Department also noted that January retail sales were up 4.7 percent compared to the same month a year ago, a deceleration from the 5.5 percent year-over-year growth reported for December.

While the retail sales report had originally been scheduled to be released Thursday morning, the release of the report was postponed due to the snowstorms that have battered the Washington. D.C. area.

Retail sales increased in line with economist estimates in the month of January, according to a report released by the Commerce Department on Friday, with the report also showing a smaller than previously reported drop in December sales. The report showed that retail sales increased by 0.5 percent in January following a revised 0.1 percent decrease in December. Economists had been expecting sales to increase by 0.5 percent. (Market News Provided by RTTNews)