2/14/2012 9:34 AM ET
(RTTNews) - Retail sales in the U.S. rose by less than expected in the month of January, according to a report released by the Commerce Department on Tuesday, with a drop in auto sales partly offsetting notable increases in sales in other segments.
The report showed that retail sales rose by 0.4 percent in January, while revised data showed that sales were unchanged in December. Economists had expected sales to increase by 0.7 percent compared to the 0.1 percent increase that had been reported for the previous month.
Excluding a 1.1 percent drop in sales by motor vehicle and parts dealers, retail sales actually rose by 0.7 percent in January compared to a 0.5 percent drop in December.
The increase in ex-auto sales came in slightly above economist estimates for a 0.6 percent, while the data for December was revised from the 0.2 percent drop that had been reported.
The report also showed that core retail sales, which exclude autos, gasoline and building materials, increased by 0.7 percent in January.
Paul Dales, senior U.S. economist at Capital Economics, said, "That compares with a 0.4% m/m fall in December and suggests that some of the stalling in sales growth at the end of last year was just temporary."
"Indeed, it now seems more plausible that annualized real consumption growth in the first quarter will at least match the fourth quarter's 2.1%," he added.
The increase in core sales reflected notable increases in sales by general merchandise stores, grocery stores, and sporting goods, hobby, book and music stores.
On the other hand, sales by non-store retailers such as online retailers fell by 1.1 percent in January following a 0.5 percent drop in December.
Jennifer Lee, Senior Economist at BMO Capital Markets, said, "This U.S. retail sales Valentine has a confusing message but if you can get past the headline, core sales were pretty sweet."
The Commerce Department also noted that total retail sales in January were up by 5.8 percent compared to the same month a year ago.
by RTT Staff Writer
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