U.S. Retail Sales in January Rose More Than Expected
15 February 2017 - 2:00PM
Dow Jones News
By Ben Leubsdorf and Jeffrey Sparshott
WASHINGTON--Retail sales rose broadly in January, a sign that
firming wage gains and solid consumer sentiment could boost overall
economic growth in 2017.
Sales at U.S. retail stores and restaurants increased 0.4% from
the prior month to a seasonally adjusted $472.14 billion in
January, the Commerce Department said Wednesday. Spending was
steady or up in most categories outside a pullback in purchases of
cars and trucks.
Excluding motor vehicles and automotive parts, sales rose 0.8%
from December. Excluding both autos and gasoline, sales were up
0.7% last month, which was the strongest reading since last
April.
Economists surveyed by The Wall Street Journal had expected a
more modest 0.1% increase in overall retail sales and a 0.5% gain
excluding autos in January. Also, December's sales growth was
revised higher in Wednesday's report, to a 1.0% gain from an
earlier estimate of a 0.6% rise.
Total retail sales in January were up 5.6% from a year earlier,
more than outpacing consumer-price increases.
Auto sales in January were down 1.4% from the prior month. U.S.
car and light-truck sales hit a record high in 2016, but automakers
reported the pace of unit sales slowed in January despite steep
discounting. Still, auto sales were up 6.8% in January from a year
earlier.
Spending at gasoline stations rose 2.3% in January from the
prior month and jumped 14.2% on the year. Prices at the pump moved
higher over the past year following a sharp decline in oil prices
that began in mid-2014.
Sales at restaurants and bars rose 1.4% in January from the
prior month, the strongest gain in 11 months, and were up 5.6% on
the year.
While total restaurant spending rose last year, many chains
reported diminished foot traffic and sales -- a trend they hope
will reverse in 2017. Buffalo Wild Wings Inc.'s same-store sales
continued to decline in late 2016 but so far in the first quarter,
"we are seeing a modestly positive traffic number," Chief Executive
Sally Smith told analysts last week.
Americans continue to shift their spending from traditional
brick-and-mortar retailers to e-commerce platforms. Department
store sales were up 1.2% in January from the prior month but fell
3.2% from a year earlier. Sales at nonstore retailers, a category
that includes online shopping, were flat in January from the prior
month but climbed 12.0% from January 2016.
Consumers are the main engine of the U.S. economy, with
household outlays on goods and services accounting for more than
two-thirds of gross domestic product.
With support from firming wage growth and low unemployment,
spending rose at a 2.5% seasonally and inflation-adjusted annual
rate in the fourth quarter and contributed 1.7 percentage points to
the overall GDP growth rate of 1.9%, according to Commerce
Department data.
Surveys of consumer confidence and business sentiment jumped
following the Nov. 8 presidential election, raising hopes for a
potential pickup in overall economic growth. But some forecasters
remain cautious as they await details on the tax, trade and other
policies that will be pursued by President Donald Trump and
congressional Republicans.
One potential snag for consumer spending in the early months of
2017: Delayed tax refunds for millions of U.S. households.
The Internal Revenue Service began accepting 2016 tax returns in
January, but a new law prevents the IRS from paying out refunds for
tax returns claiming the earned-income tax credit or child tax
credit until mid-February. The tax agency warned that, due to
processing time and the Presidents Day holiday, early filers might
not get access to their money until Feb. 27.
The measure is intended to prevent fraud by allowing the IRS to
double-check income data. But the delay could pinch low-income
families and push back some planned consumer spending from February
to March.
O'Reilly Automotive Inc. reported its same-store sales were up
4.8% in the fourth quarter compared with a year earlier, but
predicted sales growth in the 2% to 4% range for the first quarter
of 2017. The auto-parts chain blamed the expected slowdown, in
part, on the delay for tax refunds.
Spending by early tax filers, who are "generally the most
economically incentivized customers to get their money as quick as
they can," would have shown up "towards the end of January, first
of February, and we have not seen that yet because of the delay,"
Chief Financial Officer Tom McFall told analysts last week. "I
think most of that trues up before the end of the quarter, but I
don't really know for sure."
The Commerce Department's report on U.S. retail sales can be
accessed at:
https://www.census.gov/retail/marts/www/marts_current.pdf
Write to Ben Leubsdorf at ben.leubsdorf@wsj.com and Jeffrey
Sparshott at jeffrey.sparshott@wsj.com
(END) Dow Jones Newswires
February 15, 2017 08:45 ET (13:45 GMT)
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