The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
US retail sales broadly declined in January, indicating consumers took a breather after a strong holiday shopping season.
The value of retail purchases, unadjusted for inflation, decreased 0.8 percent from December after a downward revision to the prior month, Commerce Department data showed Thursday. The drop was the biggest in nearly a year.
Separate data showed US factory production fell for the first time in three months in January. The two reports pointed to a loss of momentum last month, but they’re not necessarily a sign of significant deterioration in the economy.
So far, a robust labour market and easing inflation have allowed consumers to keep spending. Recent manufacturing surveys suggest the worst of the slump is over in the sector and homebuilder sentiment rose to a six-month high this month.
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“Even as we expect spending will moderate this year, the January slowdown may overstate the near-term pull back in consumption,” Wells Fargo & Co economists Tim Quinlan and Shannon Seery Grein wrote in a note. “A still-sturdy labour market should lead to only a gradual moderation, rather than collapse in spending this year.”
Nine of 13 categories posted decreases in the retail-sales report, led by building materials stores and auto dealers. Some economists have attributed the broad-based weakness in part to severe winter weather that ravaged the US in January.
So-called control-group sales — which are used to calculate gross domestic product — dropped 0.4 percent in January, the first decline since March. The measure excludes food services, auto dealers, building materials stores and gasoline stations.
Treasury yields slid and the S&P 500 index rose while the dollar tumbled.
The retail figures largely reflect purchases of merchandise, which comprise a relatively narrow share of overall consumer outlays. A separate release due later this month will show January spending on goods and services, and those figures are adjusted for inflation.
Thursday’s figures showed purchases made at restaurants and bars — the only service-sector category in the report — climbed 0.7 percent last month. Receipts at grocery stores rose by a similar amount.
Data out Tuesday showed US consumer prices jumped at the start of the year amid a pickup in service costs, while a months-long decline in the price of goods continued to offer Americans some relief.
A separate report showed that initial applications for unemployment benefits fell to 212,000 last week, pointing to a steady labour market. The median forecast in a Bloomberg survey of economists called for 220,000.
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By Augusta Saraiva
Learn more:
US Retail Sales Beat Expectations in December
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