The U.S Census Bureau announced the retail sales report for January on Friday. As per the data, consumer spending declined last month with clothing stores marking the worst sales in over a decade. Friday’s data, as per economists, may also fuel the debate if the U.S economy is strong enough to extend its expansion at a moderate rate this year.
According to the Commerce Department, retail sales excluding certain components like building materials, automobiles, food services, and gasoline remained unchanged in January. Fridays’ announcement also downwardly revised December’s data that now suggests a 0.2% improvement in core retail sales as compared to 0.5% that was printed previously.
Core Retail Sales Were Expected To Increase By 0.3% In January
As per the experts surveyed by Reuters, core retail sales were expected to improve by 0.3% in January. Keeping unchanged last month, the core retail sales report suggested that consumer spending was weakened further in January following a significant loss of momentum in 2019’s fourth quarter.
In its first policy meeting of 2020, the U.S Federal Reserve decided in favor of keeping rates unchanged. Chairman Jerome Powell had also reiterated that the U.S economy is performing well as he testified to the U.S Senate last week. Monetary policy is likely to keep steady in 2020 following three consecutive rate cuts from the Fed in 2019.
Earlier in the week, however, economic growth in the U.S was also recorded at 2.3% in 2019 that was significantly lower than 2018’s 2.9%.
Overall retail sales in January were posted at 0.3% on Friday. December’s data was revised to show a 0.2% increase in December versus a 0.3% growth reported previously. On the auto sales front, a 0.2% rebound was noted in January versus December’s 1.7% decline. Service station receipts, on the other hand, marked a 0.5% decline last month. Appliance store sales including electronics showed a 0.5% drop in January.
Sales At Clothing Stores Post The Sharpest Decline Since March 2009
Building material stores highlighted a 2.1% increase in January that was branded the sharpest since August 2019. In December, the figure was capped at a 1.3% increase. The rise in building materials’ sales was attributed to the unlikely mild weather in January.
A massive drop of 3.1% in sales at the clothing stores was accentuated as the worst since March 2009. Mail order and online retail sales, however, improved by 0.3% last month. Furniture stores posted a 0.6% decline in January.
Bars and restaurants at large suggested 1.2% increase while books, hobby, and musical instruments’ stores climbed 0.1% in January.