Retail sales had a rough start to the year, recording their biggest drop in 11 months, according to numbers released by the U.S. Department of Commerce.
Seasonally adjusted data for January showed a 0.26 percent slump from the previous month in purchases excluding automobiles, gas stations and restaurants — the largest decline since falling 0.5 percent in February last year. December’s data was revised to show no change in sales.
Despite the downturn, the National Retail Federation noted that January’s numbers reflected growth when offset with the earlier three-month season as one of the strongest holiday sales periods in years fueled a robust 5.4 percent increase year-over-year.
“These numbers reinforce a positive start to 2018 that reflects ongoing consumer optimism brought about by solid economic fundamentals,” said chief economist Jack Kleinhenz. “Consumer spending continues to grow at a steady pace and is showing year-over-year increases across almost all retail sectors. Employment has increased, labor markets are tightening, and wage growth is on the rise. Stock market headlines are a concern for some shoppers, but households have the wherewithal to spend, and the tax cuts consumers are now seeing in their paychecks will bring an added boost.”
The NRF also reported specifics from key retail sectors, including clothing and accessories stores that were up 1.2 percent from December as well as online and non-store sales that remained unchanged. Sporting goods stores made up the only category to see a year-over-year decrease, down 0.8 percent from December.
In its 2018 economic forecast, the NRF predicted retail industry sales growth of between 3.8 and 4.4 percent over 2017.
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