In the first quarter of 2019, the US economy did not perform a miracle. Retail sales rose a mere 0.2% in January, after the little tragedy in December, when the seasonally favorable month was marked by surprisingly sluggish consumer activity. The revised value for December was probably the biggest negative point of yesterday’s report.
The preliminary value of -1.2% in December was revised down to -1.6%, thus excluding speculation about an incorrect assessment due to delays in the collection and processing of statistical information after the government stopped working.
Excluding car sales, which turned out to be very weak, retail sales rose by 0.9%. Two basic indicators of the report – sales excluding cars and fuel, as well as sales in the control group showed quite healthy growth of 1.2 and 1.1 percent. In December, these figures were revised down to -1.6 and -2.3 percent.
General consumer goods constitute the most stable core of retail sales; therefore, a corresponding increase of 0.8% in January, after a fall of 1.5%, may indicate the transitory nature of the drop of consumer spending at the end of last year. Retailers without physical stores, which also include online stores, increased sales by 2.6% in January, after a decline of 5.0% in December.
The increased volatility in the data is likely to force the Census Bureau to be doubly attentive when revising the indicators. However, it’s not just the cost of restoring the agency’s work after a 35-day vacation. The suspension of the government’s work negatively impacted consumer sentiment, but also consumer spending (primarily through the civil servants who did not know for a long time whether they would be compensated). Despite the pressure of this factor in January, retail sales have rebounded, which indicates the preservation of consumer potential.
The only weak point is in car sales, which seem to have lost touch with consumer optimism. Motor vehicle sales fell by 2.4% and year-on-year sales contracted as well.
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