The U.S. Commerce Department said on Friday retail sales excluding automobiles, gasoline, building materials and food services increased 0.6% last month after an unrevised 0.3% decline in December.
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Demand held up even after a winter storm moved through the Mid-Atlantic and Northeast regions late last month and, according to the Los Angeles Times, the spending uptick over the past two months could signal that consumers are ready to open their wallets after not splurging in the months leading up to Christmas.
While lower oil prices have translated into cheaper gasoline, boosting household discretionary spending, they are also weighing on sales at service stations.
On Wednesday, the National Retail Federation forecast above average sales this year, citing better hiring and wage increases, as well as lower gas prices.
While the 0.2 percent increase was above the market expectation of 0.1 percent, the U.S. Commerce Department also revised up the retail sales figure for December 2015 to a 0.2 percent gain instead of a 0.1 percent decline.
Sales of new cars were strong in January.
Estimates in a survey of economists range from a drop in retail sales of 0.5% to a gain of 0.4%.
Year-to-year growth in retail spending has softened since a few years ago, but remains a relatively solid section of the American economy.
Compared to January 2015, headline retail sales rose 3.4%. Excluding both categories, sales were up 0.4 per cent last month.
Consumer spending underpinned economic growth previous year, helping counter the negative impact of weakness overseas, a strong dollar and a pullback in energy investment in response to low oil prices. Sales at online retailers jumped 1.6 percent, but receipts at sporting goods and hobby stores fell 2.1 percent.
Sales in general merchandise stores rose 0.8%, nearly wiping out December’s decline, but department stores saw sales fall 0.8%.
This year, as has been the case for years now, shoppers increasingly migrated on line leading up to the holiday.
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Wal-Mart, the world’s largest retailer, is closing 269 stores, including 154 in the U.S. That’s a fraction of its 5,000 stores, but still a rare event. “It may be necessary to do more”.
