U.S. retail sales jumped 1 percent in January, reversing a six-month declining trend and defying economists’ expectations by posting the biggest increase in 14 months.
The data are a glimmer of hope for a recession-hit economy, but higher gasoline prices and sales, and buyers snapping up other items on post-holiday discounts, appeared to aid last month’s results. Analysts cautioned that the relief is unlikely to last.
The Commerce Department reported Thursday that January retail sales rose 1 percent from December after having fallen for six straight months. Wall Street economists surveyed by Thomson Reuters had expected January sales to show a drop of 0.8 percent. They plunged a revised lower 3 percent in December, which marked the weakest holiday selling season since at least 1969.
“This is a big surprise, though the net rise in sales is less impressive than it looks because (December and November) were revised down by 0.3 percent each,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a research note. “The headline relief today is welcome but it is unlikely to last.”
The January report shows strong increases in sales of automobiles and in general merchandise stores — the “big box” outlets — though sales by department stores, carrying fewer varieties of items, posted a decline. Wal-Mart Stores Inc., the world’s largest retailer, is an example of a discounter that has benefited from strapped consumers’ focus on necessities like groceries and on bargains for other items.
Sales at gas stations jumped 2.6 percent in January — the biggest increase since June, while sales of autos and parts rose 1.6 percent.
Total retail sales excluding autos and parts still rose 0.9 percent, which again easily beat estimates by economists who expected a decline of 0.5 percent.
Nonstore retailers, such as Internet and mail-order shopping, advanced 2.7 percent in January, while sales of food and beverages rose 2.1 percent. Health and personal care stores registered flat sales last month.
Despite the leap last month, retail sales were down 9.7 percent from January 2008, amid the ravages of the recession, thousands of job losses and falling home prices.
Many of the nation’s retailers last week reported sales declines for January. The Labor Department said retailers slashed about 45,000 jobs last month as they closed stores and tried to preserve cash while consumers curtailed spending.
Wal-Mart said Tuesday it will cut 700 to 800 jobs at its Arkansas headquarters as it builds fewer new stores this year and makes other operational changes. The cuts are coming in Wal-Mart’s real estate, apparel, and health and wellness departments.
Macy’s Inc. last week said it will eliminate 7,000 jobs, or almost 4 percent of its work force, while Bon-Ton Stores Inc. and apparel maker Liz Claiborne Inc. also disclosed major job cuts.
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