- Advance Retail Sales for January rose .3% versus estimates of a .3% decline and a .4% decline in December.
- Retail Sales Less Autos for January rose .3% versus estimates of a .2% gain and an upwardly revised .3% decline in December.
- Business Inventories for December rose .6% versus estimates of a .5% increase and a .4% gain in November.
BOTTOM LINE: Retail sales in the US unexpectedly rose in January, easing concern that the US economy is slipping into recession, Bloomberg reported. The gain was led by spending on autos, clothes and gasoline. Sales at automobile dealerships and parts stores jumped .6% versus a 1.1% decline in December. Sales at clothing retailers surged 1.4% and purchases at non-store retailers, which include online and catalog sales, gained .5%. Sales at building materials stores fell 1.7%. I expect retail sales to continue to improve back to more average rates over the intermediate-term on historically low interest rates, decelerating inflation, improving consumer confidence, fiscal stimulus, pent-up demand, rising stock prices, a more healthy job market and subsiding housing fears.
Inventories at US businesses in December rose more than expected and sales fell at the end of last year, Bloomberg reported. Sales fell .5% after a 1.4% gain in November. The amount of goods on hand at the current sales pace rose to 1.26 months’ worth. Inventories at retailers actually fell .1% and auto dealers saw a 1.6% decline in supplies. Inventories at building materials retailers rose .3%. Falling inventories were the main reason 4Q GDP rose a less-than-estimated .6%, subtracting 1.3 percentage points from growth. Inventory rebuilding this quarter should help add to growth.
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