The total sales that exclude automobiles and gas [petroleum] increased by 0.4 percent for the month of January, above the market expectation of a 0.3 percent rise and the previous month’s 0.1 percent increase.
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Sales at service stations fell 3.1 per cent after decreasing 0.5 per cent in December.
So-called control group sales, which exclude auto, gasoline, building materials and food services, were up 0.6%, also exceeding expectations for a gain of 0.4%. Still, the increase in consumer spending last month underscored the economy’s resilience and should ease fears of a looming recession. With December’s revision, the January data marked the fourth consecutive month of higher retail sales.
American consumers are feeling slightly more confident about their spending, according to retail sales data from the Commerce Department released on Friday.
The Census Department’s monthly report on retail sales comes from a subsample of approximately 4,700 retail and foodservice establishments, out of the more than three million that are in existence.
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.
Consumers continued to spend less at gas stations thanks to lower gasoline prices.
“Behind the gas-depressed headline, this looks like a solid start for [the first quarter]”, said Ian Shepherdson, chief economist for Pantheon Macroeconomics.
In a separate report, the University of MI said its consumer sentiment index fell to a reading of 90.7 in early February from 92 in January as households anxious about the economic outlook. That corroborates industry figures that showed automakers reported the strongest U.S. January sales in nearly a decade.
Continued strength in the labor market is keeping Americans spending.
Signs of firming consumer spending are likely to be welcomed by Federal Reserve policymakers. December sales also were revised upward to 0.2%, from an initial estimated decline of 0.1%.
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Ms. Yellen said the central bank will have more to say about the economic outlook following its next policy meeting in mid-March, but ” a lot has happened since” the Fed’s December meeting.
