WASHINGTON • US retail sales stabilised in January after a plunge the prior month that was larger than first reported, indicating consumers may still be able to help support growth after a dismal end to 2018.
The value of overall sales rose 0.2% after a 1.6% drop in the prior month that was the steepest since 2009, Commerce Department data showed yesterday. The median forecast in Bloomberg’s survey called for an unchanged reading.
Sales in the “control group” subset, which some analysts view as a cleaner gauge of underlying consumer demand, rose 1.1%, topping estimates after a 2.3% drop in the prior month. The measure excludes food services, car dealers, building-materials stores and petrol stations.
The stronger than expected report should ease concern about consumer strength after a surprisingly weak December that was likely hurt by the government shutdown and seasonal factors.
Higher wage gains and a robust labour market have supported spending, the largest part of the economy, and fresh strength bodes well for it to continue buoying growth in the first quarter, though a downward revision for December sales excluding autos and gas brought that decline to the biggest since September 2001.
Eight of 13 major retail categories showed improvement. The gains reflected the biggest jump for building materials since late 2017, the best rise for food and beverage stores since early 2016 and the strongest gain for sporting goods and hobby stores since 2013.
The spending tally, while encouraging, still isn’t likely to sway the US Federal Reserve officials, who’ve said they’d pause on interest rate decisions while they gauge the impact of multiple headwinds on the US economy.
Chairman Jerome Powell said in an interview with the CBS programme “60 Minutes” on Sunday that the central bank will watch retail sales data for signs consumer spending bounced back.
Other indicators signal a weaker start to 2019, including last Friday’s jobs report showing February payrolls growth was the weakest in more than a year. Still, consumers are also the most confident about current conditions in 18 years, Conference Board data show.
Filling-station receipts fell 2%. The figures aren’t adjusted for price changes, so lower sales could reflect lower petrol costs, sales, or both. Oil prices have rallied this year from a fourth-quarter plunge.
Automobile dealer sales slumped 2.4%, the most in five years, after a gain the previous month. Industry data from Ward’s Automotive Group previously showed US unit sales fell to a five-month low in January.
Excluding automobiles and petrol, retail sales rose 1.2%, after a 1.6% drop the previous month.
While the report was delayed by the government shutdown, the Census Bureau said response rates were at or above normal levels for the January data. Estimates in the Bloomberg survey ranged from a 0.9% decline to a 1% gain.
Sales at non-store retailers rose 2.6% for the best gain in more than a year. Sales excluding autos rose the most since May. — Bloomberg