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U.S. Core Retail Sales Rebound Solidly in January

by Reuters /

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Consumer spending appeared to regain momentum in January as households ramped up purchases of a variety of goods, in a hopeful sign that economic growth was picking up after slowing to a crawl at the end of 2015.

The Commerce Department said on Friday retail sales excluding automobiles, gasoline, building materials and food services increased 0.6 percent last month after an unrevised 0.3 percent decline in December.

These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists polled by Reuters had forecast core retail sales increasing 0.3 percent last month.

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Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, moderated in the fourth quarter. That, together with weak export growth because of a strong dollar, efforts by businesses to sell inventory and cuts in capital goods spending by energy firms, restrained GDP growth to a 0.7 percent annual pace.

Read More: Big Retailers Search for Their Spot in Shopping's Future

Consumer spending is being supported by a strengthening labor market, which is starting to lift wages.

Still, households remain cautious about boosting spending, against the backdrop of an uncertain global economic outlook and a sustained decline in oil prices, which have sparked a broad stock market sell-off.

Overall retail sales rose 0.2 percent in January as cheaper gasoline undercut receipts at service stations and harsh winter weather weighed on spending at restaurants and bars. Retail sales increased by an upwardly revised 0.2 percent in December, up from the previously reported 0.1 percent gain.

Read More: Retail Sales Decline in December as Weather, Gas Prices Deter Shoppers

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