US retail sales edge past forecasts in January, details of report stronger
US retail sales edged up at the start of the year following an exceptionally weak reading for the month before and some analysts said a detailed analysis showed weakness was being "substantially" overstated.
According to the Department of Commerce, and on a seasonally-adjusted basis, US retail sales volumes grew in January at a pace of 0.2% month-on-month to reach $504.4bn.
That was on top of a downwardly revised drop of 1.6% in the month for December.
Economists had been expecting an unchanged reading for January.
Excluding sales from the motor vehicles and parts segment, sales were 0.9% higher (consensus: 0.3%), excluding those of gasoline stations they rose by 0.4% and if both those segment were left out of the calculations then they increased by 1.2%.
Versus January, sales at motor vehicle and parts dealers shrank by 2.4%, alongside a fall of 2.0% in gasoline station sales while those at clothing stores dropped by 1.3% and those at furniture stores by 1.2%.
The so-called retail sales 'control' group, which excludes automobiles, building materials and construction jumped by 1.1% on the month (consensus: 0.6%).
"The official data are subject to endless further revisions, and we remain of the view that eventually they will be revised higher, in keeping with past experience when the numbers undershoot the Redbook," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
"To be clear, we are not arguing here that the true rate of growth of retail sales remains at last year's peak; that can't happen, given the fading boost from the tax cuts and the drop in gas prices in Q4. But the December plunge probably overstates the downshift substantially."
Following Monday's retail sales report, analysts at Barclays Research revised down their forecast for US private consumption in the first quarter from 2.5% to 2.0% and their projection for the quarterly annualised pace of GDP growth over the three months to March from 2.5% to 2.0%.
But forecasts for the remaining three quarters of 2019 were unchanged, resulting in a projection of 2.4% for full-year growth, versus 2.5% beforehand.
"The weakness in December sales coincided with a period of asset market losses and weak consumer sentiment amid government shutdown concerns. In addition, it is likely that sales were pulled forward in November due to the Black Friday weekend.
"[...] In addition to the factors that we believe weighed on December sales, revisions to our forecast could be interpreted as reflecting a faster fading of the effects of fiscal stimulus on household spending."