U.S. retail sales rose more than forecast last month in a broad-based advance that indicates the consumer is well-positioned to propel the economy in early 2017.
The 0.4 percent advance in January followed a 1 percent gain in the prior month that was larger than previously reported, a Commerce Department report showed Wednesday. The median forecast in a Bloomberg survey called for a 0.1 percent rise. Excluding a decline at auto dealers, sales increased the most in four months.
Steady hiring, a modest improvement in wage growth and discounting are keeping consumers spending, providing a solid start to the first quarter. Household purchases, which account for about 70 percent of the economy, are projected to drive growth while rising business optimism also suggests a pickup in investment.
“We will see decent retail sales in coming months,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. “The job market is tight. The fundamentals continue to be very supportive. The story for 2017 will again be one of the consumer driving the economy.”
Estimates for sales ranged from a 0.2 percent decline to a
0.5 percent advance. The December reading was previously reported as a 0.6 percent rise.
Ten of 13 major categories showed a pickup in the value of sales last month, led by merchants of electronics and appliances, sporting goods and clothing, according to the report.
Retail sales excluding automobiles and gasoline service stations increased 0.7 percent, exceeding projections and the biggest gain since April.
Automobile dealers’ sales fell 1.4 percent after a 3.2 percent surge the previous month.
Industry data earlier this month showed the pace of car sales cooled in January. Purchases of cars and light trucks grew at a 17.5 million annualized rate, the weakest since August, according to Ward’s Automotive Group. A month earlier, vehicle purchases grew at the fastest pace since mid-2005.
Receipts at gasoline stations rose 2.3 percent. The Commerce Department’s retail sales data aren’t adjusted for prices, so higher fuel costs boosted filling-station results.
The Commerce Department’s retail figures that are used to calculate gross domestic product and which exclude categories such as food services, auto dealers, home-improvement stores and service stations, stayed strong. The so-called retail control group’s sales rose 0.4 percent for a second month.
Purchases of electronics and appliances advanced 1.6 percent in January, the most since June 2015. Purchases of sporting goods climbed 1.8 percent, the biggest advance since July 2015. Clothing retailers had a 1 percent increase in receipts, the most since February of last year.