by Apparel Resources News-Desk
12-March-2019 | 2 mins read
US retail sales surprisingly rose in January after a December drop that was even larger than originally estimated, but the recovery was not seen strong enough to alter the course of a US economy that was losing momentum in early 2019.
The retail sales report from the Commerce Department was welcome news for the economy after a raft of weak December data, as well as a sharp moderation in the pace of job growth in February. Still, January’s increase in US retail sales recouped only a fraction of December’s plunge, leaving expectations for a slowdown in consumer spending in the first quarter intact.
The Department said retail sales rose 0.2 per cent. Data for December was revised down to show retail sales dropping 1.6 per cent instead of tumbling 1.2 per cent as previously reported. The drop in December was the biggest since September 2009 when the economy was emerging from recession. The January retail sales report was delayed by a 35-day partial shutdown of the federal government that ended on January 25. February’s retail sales report will be released on April 1.
Retail sales rebounded 1.1 per cent in January after a downwardly revised 2.3 per cent plunge in December — the largest drop since 2000. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product (GDP).
They were previously reported to have decreased 1.7 per cent in December. Consumer spending accounts for more than two-thirds of US economic activity. Coming on the heels of a deterioration in the trade deficit in December and weak construction spending, the downward revision to the core retail sales suggested GDP growth slowed more than the government initially estimated in the fourth quarter.
The government reported last month that the economy grew at a 2.6 per cent annualised rate in the October-December quarter after expanding at a brisk 3.4 per cent in the third quarter.