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The U.S. Department of Commerce released January retail sales this morning, reporting that sales rose 0.5% from December and 4.7% year-on-year (adjusted). Analysts and pundits alike are cheering the “better-than-expected” performance, along with the slight upward revisions to November and December results. Indeed, this certainly looks like a strong showing, as this is the third straight YoY gain after 14 consecutive monthly declines:
However, the gains are more representative of the extremely easy comparisons from last winter, when overall sales tumbled 9.1%, 10.9%, and 9.7% in November, December and January respectively. To put in perspective how absolutely dismal 2009 was, consider that in the previous 15+ years, from January 1993 through August 2008, there were a total of only 2 months in which YoY decreases were reported:
For the month, Gasoline Stations (+29.0% YoY /+0.4% MoM) and Nonstore retailers (+12.4% YoY /+1.6% MoM) were among the strongest gainers. Total sales excluding Autos were up 4.6% from last year, while total sales less Autos and Gas Stations showed a 2.0% year-on-year gain. Not surprisingly, stores which are highly leveraged to the housing market, including Furniture & Home Furnishings Stores (-4.4% YoY/-1.4% MoM) and Building Materials & Supplies Dealers (-6.3% YoY/-1.2% MoM) continue to struggle mightily, and have yet to gain any traction.
Perhaps more worrying is the weak spending at department and electronic stores. While sales at department stores decreased “only” 0.3% in January from a year ago, it was the 34th straight decline, and sales at electronic and appliance stores dropped 7.0% compared to last January, the 17th conseuctive monthly decline. For all the talk of “pent-up” demand, we have yet to see any recovery in discretionary spending at these stores.
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The bottom line is consumers are still extremely anxious about their own personal finances, and any improvements in the housing and labor markets could be fleeting, especially as the Fed begins talk of an exit strategy. We expect relatively strong year-over-year gains to continue throughout the year due to easy comparisons, but suspect consumer spending will lag historical post-recession recoveries.
Click here for detailed tables and graphs by line of business.
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