Total retail and food service sales for January dipped by 0.3% from December, according to data released by the U.S. Census Bureau. The poor performance undermines the optimistic tone the retail community has been touting lately following strong holiday sales.
The performance prompted IHS Markit to lower its Q1 GDP forecast by two tenths of a percent to 2.3%.
The $492 billion total for January represented a seasonally adjusted 3.6% increase over the prior year period. Excluding motor vehicle and parts sales, sales for the month were $391.6 billion.
The December 2017 retail sales were revised from up 0.4% to virtually unchanged. The revised number prompted IHS to lower its fourth quarter personal consumption growth by three tenths to 3.5% and its personal spending growth forecast for the first quarter down by five tenths to 2.3%.
Non-store sales, which include e-commerce pureplays, was flat when compared to December at $55 billion but up 10.2% over January 2017.
Stores that primarily focus on apparel remained positive. Clothing and accessories stores reached $22.1 billion, a 1.2% increase over December and a 1.9% boost over January 2017. At $12.7 billion in sales, department stores saw a 0.8% increase over December and a 0.4% gain over the prior year period.
Auto sales were down by 1.2% to 100.4 billion compared to December though they were up 1.6% over the prior year period. Gas sales were up 1.6% from December and 9.0% from January 2017 on higher prices at the pump.
Though the home goods has been noted as a bright spot lately, building materials and garden related stores saw a 2.4% month-to-month decline in sales. At 31.9 billion, it still represents a 3.6% increase over last January.
“Colder weather may have been the reason for the surge in spending at clothing and department stores while deep price discounting may have propelled electronics stores into positive territory,” said Chris Christopher, executive director, U.S. and Consumer Economics, IHS Markit. “The colder weather, however, likely also contributed to less spending at building materials and garden supply stores.”
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