By MarketWatch, MarketWatch
The numbers: Retail sales in the U.S. rose modestly in January as Americans spent more money eating out and furnishing their homes, but spending was relatively soft at the start of the new year.
Retail sales climbed 0.3% last month, the government said Thursday, matching the MarketWatch forecast.
About half of the increase last month, however, was generated by home centers such as Home Depot and Lowe’s that sell lots of building supplies to small businesses. Sales were soft in most other segments of the retail industry that largely cater to households.
What happened: Sales at home centers jumped 2.1% to mark the biggest increase since last summer.
Bars and restaurants also saw a sharp increase in sales, which rose 1.2% for the second month in a row. People go out to eat more when they are confident in the economy.
Companies that sell home furnishings also reported a 0.6% rise in receipts as they continued to benefit from rising home sales. Sales also rose slightly for auto dealers and internet retailers.
On the negative side of the ledger, sales declined at gas stations owing to lower prices at the pump.
Sales also fell a steep 3.1% at clothing stores — the biggest decline since 2009. Warmer than usual temperatures likely depressed purchases of cold-weather apparel.
Other segments that posted lower sales included pharmacies and box stores that sell electronics and appliances.
Sales for December and November were both reduced a tick to show a 0.2% increase in each month, reflecting somewhat softer business conditions at the end of the year.
Big picture: Retail sales didn’t appear to add much to the economy in January. A more narrow measure of sales that is used in the government’s calculation of gross domestic product was basically flat in the month.
Yet retail sales — and consumer spending more broadly — are expected to rise fast enough in 2020 to keep the economy expanding at a steady pace. Higher incomes and the lowest jobless rate in 50 years have given Americans a lot of confidence in the economy.
What they are saying? “American retailers didn’t get much love in January,” said economist Katherine Judge of CIBC Economics
“Given the strong pace of job gains and signs of rising wages, this pace of retail sales is certainly sustainable and it may increase a bit in coming months,” said David Berson, Nationwide chief economist.
Both indexes have set fresh record highs in the past week, but continuing worries about the spread of the COVID-19 appear to have limited further gains.
The 10-year Treasury yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -2.93% slipped to 1.59%.