US retail sales fell for the second straight month in January, pulled lower by falling petrol prices, the Commerce Department says. Retail and food services declined 0.8 per cent from December, according to the seasonally adjusted data released on Thursday, double the drop expected by analysts. In December, sales had fallen 0.9 per cent. Retail sales excluding motor vehicles and parts fell 0.9 per cent in January. The rapid decline in global crude oil prices since June once again was a dr
ag on the overall US retail sales data, which are not adjusted for price changes.
Petrol sales at the pump dropped 9.3 per cent in January, the steepest monthly decline in six years, and were down 23.5 per cent from a year ago.
But most other sectors also saw sales fall, including autos, down 0.5 per cent, clothing stores (-0.8 per cent), and sporting goods, hobby, book and music stores (-2.6 per cent).
Though consumers pulled back in other areas, they pushed up sales in restaurants and bars, by 0.8 per cent.
Sales of building and garden supplies rose 0.6 per cent, miscellaneous store sales surged 2.6 per cent and online sales gained 0.5 per cent.
Retail sales data provide a snapshot on consumer spending that accounts for about 70 per cent of US economic activity.
Ian Shepherdson of Pantheon Macroeconomics projected a surge in sales over the next few months as the drop in petrol prices works through the monthly data.
“In the meantime, we expect to hear these data cited as a reason for the Fed to stick to its ‘patient’ line, but in our view the rapid tightening of the labour market is much more powerful in driving Fed decisions than the retail sales data,” Shepherdson said.
Year over year, January sales were up a solid 3.3 per cent.
AFP
