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U.S. Retail Sales Unexpectedly Decrease In January


Retail sales in the U.S. unexpectedly decreased in the month of January, the Commerce Department revealed in a report on Wednesday.

The Commerce Department said retail sales fell by 0.3 percent in January compared to economist estimates for a 0.2 percent uptick in sales.

Revised data showed that retail sales were unchanged in December compared to the previously reported 0.4 percent increase.

The unexpected decrease in retail sales was primarily due a steep drop in sales by motor vehicle and parts dealers, which plunged by 1.3 percent in January after slipping by 0.1 percent in the previous month.

Excluding the decrease in sales by motor vehicle and parts dealers, retail sales were unchanged in January after inching up by 0.1 percent in December. Ex-auto sales had been expected to climb by 0.4 percent.

Notable decreases in sales by building material and supplies dealers and health and personal care stores offset jumps in sales by gas stations, clothing and accessories stores and miscellaneous store retailers.

Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, were unchanged in January after falling by 0.2 percent in December.

"Overall, some of the weakness in January retail sales could be linked to the unusually high number of reported flu cases last month but, on balance, it was probably inevitable that sales would start to slow after their recent strength," Andrew Hunter, U.S. Economist at Capital Economics.

He added, "In any case, with jobs growth still strong, consumer confidence at an unusually high level and the recent tax cuts providing a one-off boost to disposable incomes this month, the near-term prospects for consumer spending remain fairly bright."

Compared to the same month a year ago, retail sales were up by 3.6 percent in January compared to the 5.2 percent year-over-year jump in December.

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