Sales at U.S. retailers rose less than forecast in January, depressed by a drop in demand at building material stores and restaurants that may reflect the influence of harsh winter weather.
Purchases increased 0.3 percent, the smallest gain since a drop in June and followed a 0.5 percent December gain that was less than previously estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 0.5 percent rise.
Sales at retailers like Gap Inc., Limited Brands Inc. and Macy’s Inc. topped analysts’ estimates last month as merchants used promotions to lure post-holiday shoppers before storms blanketed much of the U.S. mid month. Federal Reserve policy makers are among those saying bigger gains in employment are needed to ensure American consumers sustain spending.
“The weather kept people shoveling snow rather than heading to the mall,” said Russell Price, a senior economist at Ameriprise Financial in Detroit, who accurately forecast the gain in retail sales. “The consumer’s role in the recovery will take greater prominence in coming months. We definitely need to see further improvement in the labor market to have continued increases in spending.”
Manufacturing in the New York region sped up in February, and the cost of imported goods climbed last month, other reports today showed.
New York Manufacturing
The Federal Reserve Bank of New York’s general economic index rose to 15.4, the strongest reading since June. Readings greater than zero signal expansion in the so-called Empire State Index, which covers New York, northern New Jersey, and southern Connecticut.
Import prices climbed 1.5 percent in January, Labor Department figures also showed today. Excluding food and fuel, costs rose 0.6 percent.
Stock-index futures held earlier losses after the reports. The contract on the Standard & Poor’s 500 Index maturing in March fell 0.2 percent to 1,325.5 at 8:45 a.m. in New York.
The projected gain in retail sales was based on the median forecast of 79 economists in the Bloomberg survey. Estimates ranged from a gain of 1.1 percent to a drop of 0.5 percent. The December increase in sales was previously estimated at 0.6 percent.
Eight of 13 major categories showed an increase in demand last month, led by auto dealers, grocery stores and service stations.
Gasoline Prices
Filling station sales advanced 1.4 percent. The data, which aren’t adjusted for inflation, got a boost from rising gasoline prices. Regular fuel in January reached an average $3.10 a gallon, or 11 cents more than December, according to AAA, the nation’s biggest motoring organization.
Sales climbed 0.5 percent at automobile dealers, consistent with industry figures that showed car purchases climbed last month to a 12.54 million unit annual pace that was the best since the government’s cash-for-clunkers program in August 2009.
Purchases excluding autos increased 0.3 percent, today’s report showed. They were projected to rise 0.5 percent, the survey median showed.
Demand dropped 2.9 percent at building-material stores, the most since May.
Excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, sales increased 0.4 percent after a 0.1 percent decrease the prior month.
Restaurant Receipts
Restaurant receipts dropped 0.7 percent, the biggest decrease since March 2009. In contrast, the 1.3 percent gain at grocery stores was the biggest since August.
Whole Foods Market Inc., the largest U.S. natural-goods grocer, last week raised its annual profit and revenue forecasts after the Austin, Texas-based company’s first-quarter earnings beat analysts’ estimates.
“Our results underscored signs that consumer confidence continues to improve,” Co-Chief Executive Officer Walter Robb said on a Feb. 9 conference call.
Winter storms spread from the Midwest and the South to New England, covering 71 percent of the country with snow on Jan. 12, according to the National Climatic Data Center.
Promotions and clearances lured customers after the holidays, helping retailers ring up sales early in the month before bad weather slowed shopping in the last two weeks, according to David Bassuk, head of the global retail practice at consultant AlixPartners in New York.
Chain-Store Sales
Sales at stores open at least a year at the more than 30 chains tracked by Retail Metrics climbed 4.4 percent in January for a 17th straight gain, surpassing its estimate of a 2.6 percent increase.
Gap, a clothing retailer based in San Francisco, benefited from higher same-store sales at Banana Republic stores, while the Victoria’s Secret lingerie chain fueled results at Columbus, Ohio-based Limited. Department store Macy’s sales capped a year of “remarkable achievement in a period of economic uncertainty,” Chief Executive Officer Terry Lundgren said in a Feb. 3 statement.
The recovery’s inability to create more jobs is one thing holding back consumers. While unemployment fell to 9 percent in January, from 9.4 percent in December, it has been 9 percent or higher since May 2009, the longest period of elevated joblessness since monthly records began in 1948.
Fed Chairman Ben S. Bernanke and fellow policy makers are awaiting further proof of a durable pickup in the labor market that will lift growth. That’s one reason why they are pressing ahead with a second round of monetary stimulus worth $600 billion.
Source: Bloomberg By
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