US core retail sales rebound solidly in January

FEB 12, 20169:52 PM

[WASHINGTON] US consumer spending appeared to regain momentum in January as households ramped up purchases of a variety of goods, in a hopeful sign that economic growth was picking up after slowing to a crawl at the end of 2015.

The Commerce Department said on Friday retail sales excluding automobiles, gasoline, building materials and food services increased 0.6 per cent last month after an unrevised 0.3 per cent decline in December.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists polled by Reuters had forecast core retail sales increasing 0.3 per cent last month.

Growth in consumer spending, which accounts for more than two-thirds of US economic activity, moderated in the fourth quarter. That, together with weak export growth because of a strong dollar, efforts by businesses to sell inventory and cuts in capital goods spending by energy firms, restrained GDP growth to a 0.7 per cent annual pace.

Consumer spending is being supported by a strengthening labor market, which is starting to lift wages.

Still, households remain cautious about boosting spending, against the backdrop of an uncertain global economic outlook and a sustained decline in oil prices, which have sparked a broad stock market sell-off.

Overall retail sales rose 0.2 per cent in January as cheaper gasoline undercut receipts at service stations and harsh winter weather weighed on spending at restaurants and bars. Retail sales increased by an upwardly revised 0.2 per cent in December, up from the previously reported 0.1 per cent gain.

Sales at service stations fell 3.1 per cent after decreasing 0.5 per cent in December. Auto sales advanced 0.6 per cent after rising 0.5 per cent in December.

Receipts at clothing stores gained 0.2 per cent. Sales at online retailers jumped 1.6 per cent, but receipts at sporting goods and hobby stores fell 2.1 per cent. Sales at electronics and appliance outlets edged up 0.1 per cent.

A snowstorm that blanketed much of the northeastern United States last month boosted sales at building materials and garden equipment stores, which rose 0.6 per cent. But receipts at restaurants and bars fell 0.5 per cent, the largest drop since January 2014.

REUTERS