US retail sales fall sharply in January; weekly jobless claims decline
WASHINGTON (Reuters) — U.S. retail sales fell more than expected in January, pulled down by declines in receipts at auto dealerships and gasoline service stations.
Retail sales dropped 0.8% last month, the Commerce Department's Census Bureau said on Thursday, also likely weighed down by winter storms. Data for December was revised lower to show sales rising 0.4% instead of 0.6% as previously reported.
Economists polled by Reuters had forecast retail sales dipping 0.1%. Retail sales are mostly goods and are not adjusted for inflation. The fall followed a fairly strong performance over the holiday season. December sales are also partially flattered by generous seasonal factors, the model the government uses to strip out seasonal fluctuations from the data.
Unadjusted retail sales typically fall in January. The seasonal factors were less supportive for this January compared to previous years, resulting in the large drop in adjusted sales last month. Economists had cautioned before the release of the data not to read too much into any sharp drop.
«It is hard to know exactly what the 'right' seasonal factor is for a given month but the seasonal factors associated with December 2023 and January 2024 look unusual relative to the ones associated with these months in earlier years,» said Daniel Silver, an economist at JP Morgan in New York. «The individual seasonally adjusted changes for these months likely should be discounted when trying to determine the trend for the data.»
Though momentum is likely to slow this year, consumer spending remains healthy, thanks to a resilient labor market and rising household purchasing power as inflation subsides.
A separate report from the Labor Department on Thursday showed initial claims
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