The U.S. January retail sales data surprised to the upside.
January retail and food services sales rose 1.0%, ex-autos rose 0.9%, and ex-autos and gas grew 0.8%. This represents a far better outcome than the drops expected — the median estimate in the Market News International poll for overall sales was a 0.8% decrease — and comes after six consecutive months of declining sales.
However, it’s too soon to call a bottom in spending. Unadjusted sales were down 9.0%. So the entire gain was in the seasonal adjustment factor — probably reflecting the fact that consumers waited for post-holiday bargains and therefore threw off the traditional adjustments.
Auto and parts sales posted up 1.6%, in contrast to the drop anticipated given weak unit sales of new vehicles. Again, the series dropped prior to seasonal adjustment. The retail data use different seasonals than the unit sales data.
January sales gains were centered in electronics at plus-2.6%, food at a 2.1% increase, clothing at a 1.6% rise, and Internet and catalogues at a 2.7% gain, all after two months of drops. Good gains were posted in restaurants at plus-0.8%, and health care was flat. There were some signs of sales weakness that suggest economists will be careful about calling a turn in spending.
— Market News International
