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An unexpected drop in auto sales and a slowdown in online shopping resulted in US retail sales rising less than expected in January, government data released on Tuesday showed.
US retail sales rose less than expected in January, with government data released Tuesday showing an unexpected decline in auto sales and a slowdown in online shopping.
Overall retail sales increased 0.4 percent after being flat in December, the Commerce Department reported, only half the gain forecast by analysts.
The drag was mainly down to a 1.1 percent drop in car and autoparts sales, CNN Money reported. Excluding the fall in auto sales, total retail sales rose 0.7 percent in the latest report, according to the Agence France Presse.
“January’s retail sales data are better than they look, but they don’t suggest that consumption growth is about to set the economic recovery alight,” said Paul Dale, senior US economist for Capital Economics.
The drop in auto sales surprised experts as automakers reported their best monthly US sales since summer 2009. However, many of the gains in reported sales were due to a leap in fleet sales to businesses, such as rental car companies, which do not get included in the retail sales reading and appear instead in GDP investment accounts.
A 1.4 percent rise in spending at gasoline stations – the biggest gain since March 2011 – and a 0.5 percent upturn in receipts for electronics helped fuel the overall increase in retail sales in January, Reuters reported.
Shopping at nonstore retailers (primarily online sales) dropped 1.1 percent, the biggest decline since March 2009. However post-holiday markdowns and gift cards received during the holiday season sent people out into the stores, pushing spending at general merchandise retailers (including department stores) up 2 percent from December.