Source: AFP
Retail sales in the United States fell more than analysts expected last month, bogged down by weak auto sales and lower gas prices, government data showed on Thursday.
The 0.8 percent drop missed analysts’ expectations, bringing total sales down to $700.3 billion, the Commerce Department said.
That comes after a strong performance in the consumer sector last year — helped by a resilient labor market — supporting economic growth.
A larger-than-expected slowdown in spending, if it continues, could dampen hopes that consumption will continue its role as a key economic driver.
“The big picture here remains that consumer spending was remarkably strong for much of last year, but some easing seems inevitable this year,” analysts at Pantheon Macroeconomics said in a recent report.
Excluding the auto sector, retail sales fell 0.6 percent in January from December — a fact analysts attributed to higher interest rates on loans and an easing of subdued demand after supply chain problems were resolved.
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Excluding gas stations, sales fell 0.8% over the same period.
In addition to auto and parts dealers, which saw sales fall 1.7 percent, sales at gas stations also fell 1.7 percent, according to the latest Commerce Department data.
Other sectors that showed weakness included dealers in building materials and supplies, as well as health and personal care stores.
But spending at restaurants and bars continued to hold up, rising 0.7%.
The weakening of spending comes now as excess savings have “shrunk significantly and real after-tax income growth is slowing,” according to Pantheon.
“But a gradual moderation looks much more likely than a collapse, given the recent recovery in consumer confidence,” the economists’ report said.
Source: AFP