Feb. 14, 2013 – Pent-up demand for new or replacement vehicles helped retail sales log a 0.1 percent uptick in January, NAFCU economists said.
Payroll taxes took a bigger bite out of paychecks last month. But according to NAFCU Research Assistant Doug Christman, retail sales were helped by auto sales, which rose partly due to consumers replacing older vehicles and partly due to Hurricane Sandy-related replacement purchases.
A 1.1 percent jump in sales at general merchandisers led all retail categories in January. Sales dropped most severely for clothing and accessories stores (-0.3 percent) and furniture and home furnishings stores (-0.2 percent).
NAFCU economists noted that strength in homebuilding can be seen in sales increases for building materials, garden equipment and supplies dealers. Flat restaurant and bar sales, and a slight decline in clothing sales, could reflect the effects of the payroll tax hike.
Core retail sales, which exclude light vehicles and gasoline, increased 0.2 percent in January, while retail sales of autos and gas increased 0.4 percent, echoing December’s numbers.
On a year-over-year basis, retail sales shrank from 4.8 percent in December to 4 percent in January. Core retail sales increased 3.6 percent from a year ago, while autos and gas increased by 5 percent on a year-over-year basis.
Improvements in the housing and labor markets continue to support economic growth, Christman noted, but uncertainty regarding fiscal policy has continued to drag down GDP and consumer confidence. “Overall, employment and income growth will be the key driver of retail sales and consumer spending going forward.”