 | Retail Sales Increased 0.1% in January, Matching Consensus Expectations |
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| Posted Under: Data Watch • Retail Sales |
Implications: Consumers started 2013 with neither a bang nor a whimper. Instead, it was more plow horse growth. Don't be fooled by analysts saying the payroll tax hike is killing the consumer. Overall retail sales were up 0.1% and 0.2% excluding autos. "Core" sales, which exclude autos, building materials, and gas, rose 0.1% in January and were up 0.4% including upward revisions to prior months. The gain in overall sales was better than in four of the twelve months of 2012, well before the payroll tax hike. Given today's data on sales and inventories, it looks like real GDP grew at about a 0.6% annual rate in Q4, a significant upward revision from the original estimate of -0.1%. For 2013, we expect two themes to play out: first, a modest acceleration in consumer spending growth despite the recent tax hike; second, a transition away from growth in auto sales and toward other areas, like furniture, appliances, and building materials. Consumer spending should accelerate because of continued growth in jobs, hours, and wages. In addition, households have the lowest financial obligations ratio since the early 1980s. (The share of after-tax income they need to make recurring monthly payments, such as mortgages, rent, car loans/leases, as well as debt service on credit cards, student loans and other lending arrangements.) Meanwhile, the upturn in home construction in the past 18+ months means more rooms for appliances, electronics, and furniture. In other news this morning, import prices were up 0.6% in January, but still down 1.3% from a year ago. The decline in the last year is due to oil prices, which are down 5.9%. Excluding oil, import prices are up 0.2% in the past year. Export prices were up 0.3% in January and up 1.1% versus a year ago. The rise in export prices in the past year is due to farm products, which are up 10.7%. Excluding agriculture, export prices are unchanged in the past year.
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