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WASHINGTON (AFP) –
US retail sales opened the year with a bigger-than-expected bounce, official data showed Friday in a report suggesting recovery from recession is gaining momentum.
The Commerce Department reported that seasonally adjusted retail sales increased 0.5 percent to 355.8 billion dollars in January.
The monthly increase in retail and food-service sales was better than the 0.3 percent forecast by most analysts and followed upwardly revised numbers for the previous two months.
"Consumers opened their wallets a little wider and that is good news for the economy," said Joel Naroff of Naroff Economic Advisors.
The Commerce Department revised the decline in December sales to a scant 0.1 percent, from a drop of 0.3 percent, and the November sales increase was raised 0.2 point to 2.0 percent.
"With last month?s decline being revised upward, this report is even stronger than it looks," Naroff said.
But he warned that "between snowstorms and Toyota shutting down sales for a while, I would not be surprised if the February numbers are weak."
The latest data, which are not adjusted for price changes, showed sales fell in only four of the 13 sectors measured, notably in housing-related sectors such as furniture and building materials.
Excluding often-volatile auto and gasoline sales, retail sales rose 0.6 percent.
Scott Hoyt at Moody's Economy.com said that winter weather "likely reduced demand for home improvement and other housing-related goods, while boosting demand for food and other winter weather supplies sold at warehouse clubs and grocery stores."
January retail sales were up 4.7 percent from the year-ago level, when consumers hunkered down in the face of the near-collapse of the US financial system and the 13th month of official recession.
"This is a promising start to the year, especially in light of all of the headwinds that still face the US consumer," said Jennifer Lee at BMO Capital Markets.
With the jobless rate at 9.7 percent and expected to remain elevated even as the economy recovers, "give kudos to US consumers for doing their part to spur economic growth, despite still-high unemployment," Lee added.
Consumer spending drives two-thirds of US output and is a key in sustaining the economy's government-stimulated recovery from the worst recession in decades.
However, President Barack Obama's administration has repeatedly emphasized that consumer spending would not be as powerful a driver in this economic recovery as it has in past recessions.
Many analysts share that view and are forecasting weak consumer spending in the coming months, particularly as authorities wind down extraordinary measures taken to stimulate the recovery.
US gross domestic product (GDP) expanded at a strong 5.7 percent pace in the fourth quarter, in a second straight quarter of growth after four quarters of contraction.
"Perhaps the most impressive figure in this report was core retail sales -- which removes the impact of autos, gasoline stations and building materials -- which is fed into the personal spending data in the GDP report," said Lee.
"Core sales jumped 0.8 percent in January, the second-largest increase in the past 11 months, an indication that consumer spending started the quarter off on a strong note."
