Retail sales inched higher in January as consumers adjusted their spending in response to the increase in payroll taxes and rise in gasoline and energy prices.
According to the National Retail Federation, January retail sales (excluding automobiles, gas stations and restaurants) increased 0.3% seasonally adjusted from December and increased 5.4% unadjusted year-over-year.
“Today’s retail sales figures continue to indicate a stable yet fragile economy,” NRF President and CEO Matthew Shay said. “Consumers are continuing to hold back on spending just as our economy is held back by political brinkmanship in D.C. The failure to address the critical challenges confronting our economy will continue to dampen consumer confidence, which will in turn mute sales and growth. The economy will continue to limp along until our politicians finally address our tax and spending challenges and put forward a pro-growth, pro-jobs agenda.”
January retail sales, released Wednesday (Feb. 13) by the U.S. Department of Commerce, showed total retail and food services sales (which include non-general merchandise categories such as automobiles, gasoline stations, and restaurants) increased 0.1% seasonally adjusted month-to-month and increased 4.7% adjusted year-over-year.
“With the return of healthy housing prices, stronger employment statistics combined with historic highs on Wall Street at the end of 2012 and 2013, consumers seem a bit more confident these days,” NRF Chief Economist Jack Kleinhenz said. “Even though retail sales were relatively modest in January, consumers seem to have adjusted accordingly to rising taxes and energy prices. Far from secure, consumer confidence continues to be shaky.”
In late January, NRF released its annual retail sales forecast for 2013. NRF estimates that retail industry sales (excluding automobiles, gas stations and restaurants) will increase 3.4% in 2013, with online sales set to grow between 9 and 12%.
Retail sales can hint at economic growth potential as consumer spending comprises nearly 70% of the nation’s gross domestic product.
Dennis Gartman, CNBC contributor and analyst, says he’s bearish on retail in the near term as delayed tax refunds and higher gas prices are likely to deliver a one-two punch to consumer spending through the first half of 2013.
It’s also important to note, that Wal-Mart Stores Inc. and a growing number of other retailers do not report monthly sales.
Following are year-over-year comparisons by retail category:
Clothing and apparel accessories stores' sales, up 5.9%
Electronics and appliance stores’ sales, up 2.7%
Furniture and home furnishing stores’ sales, up 5.8%
General merchandise stores’ sales, down -0.3%
Health and personal care stores’ sales, up 0.7%
Nonstore retailers’ sales up 17.5%
Sporting goods, hobby, book and music stores’ sales, up 8.3%