US retail sales unexpectedly drop in January
US retail sales unexpectedly fell in January, according to data from the Commerce Department.
Sales were down 0.3%, missing expectations of a 0.2% rise and posting their biggest drop in nearly a year. Meanwhile, December's month-on-month change was revised down to a flat reading from 0.4% growth.
Excluding autos, retail sales were flat, and excluding autos and gasoline, sales were down 0.2%. Excluding autos, gasoline, building materials and food services, retail sales were flat on the month following a downwardly-revised 0.2% decline in December.
Sales at gas stations rose 1.6% on the back of higher gas prices, while motor vehicles and parts dealers saw sales drop 1.3%, and sales at furniture and home furnishing stores declined 0.4%.
Sales at electronics and appliance stores were up 0.5% in January, while clothing and clothing accessories stores saw sales rise 1.2% and sales at online retailers and restaurants were flat.
On the year, retail sales were up 3.6% last month.
Andrew Hunter, US economist at Capital Economics, said the month-on-month drop in retail sales "isn't a huge concern given that it follows a surge in sales the fourth quarter of last year".
"Headline sales were arguably a little worse than they looked, given that they were boosted by a 1.6% m/m price-related rise in nominal gas station sales. That said, most of the weakness in the headline reading was concentrated in building materials and, in particular, auto sales. Excluding autos, gasoline and building materials, the unchanged reading for so-called control group sales was also weaker than consensus expectations, but in line with our own estimate.
"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. 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."