Retail Sales Rebound in January

Washington, D.C. Post-holiday bargains and deals may have been too good for shoppers to pass up as January retail sales defied analysts’ predictions and increased slightly over the previous month, reversing six consecutive months of decline.

The Commerce Department said total retail sales rose 1% in January, while sales excluding motor vehicles and parts were up 0.9% after a revised record 3.2% decline in December. Analysts had expected sales excluding automobiles to decrease 0.4% from the prior month.

The January rise was the highest reading since May 2008. Analysts had predicted sales, excluding motor vehicle and parts, to drop by 0.5%.

Rising retail sales were seen in a broad range of categories. Gasoline stations and electronics and appliance stores both notched up 2.6% sales gains from December.

Dealer sales of autos and auto parts climbed 1.6%. Clothing sales also rose 1.6% and grocery stores posted a 2.2% increase. Reflecting the prolonged housing crisis, sales of building material and garden-equipment stores had the sharpest decline of 3.2%. Furniture and home-furnishings store sales fell 1.3%.

Despite the rise, experts cautioned that the retail industry has some tough months ahead of it.

“While 2009 got off to a surprising start, it’s going to be difficult for retailers to maintain this momentum,” said the National Retail Federation's chief economist Rosalind Wells. “We expect the first half of the year to present challenges while giving way to sustained growth in the fourth quarter.”