Retail spending rose well ahead of expectations in January, boosted by a new round of stimulus checks.
Retail sales in January rose 5.9% from December and 10.7% year-over-year, according to the National Retail Federation, whose calculation excludes auto dealers, gasoline stations and restaurants. That compared with a decrease of 2.2% month-over-month in December.
The U.S. Census Bureau said overall retail sales (including restaurants/bars and auto) in January were up 5.3% from December. That compares with a monthly drop of 1% in December. Economists surveyed by Refinitiv expected January sales to rise 1.1%.
The gains in January build on the momentum of the November-December holiday season, when retail sales as calculated by NRF rose 8% year-over-year to a record $787.1 billion even after being revised down from a preliminary estimate of $789.4 billion. For the full year, 2020 was up 6.7% over 2019.
Commenting on January’s results, NRF chief economist Jack Kleinhenz said there was no falloff in spending that often occurs find post-holiday and the increase was even better than expected.
“There is plenty of purchasing power available for most consumers, and the pickup in shopping has even been reflected in the number of hours worked by retail employees,” he said. “Confidence is building thanks to the availability of COVID-19 vaccines and states and local governments are beginning to remove restrictions on economic activity. Going forward, I expect consumer spending to build on this momentum.”
There were month-over-month increases across the board in January and year-over-year gains in seven out of nine retail categories, led by electronics and appliance stores on a monthly basis and online sales on a yearly basis.
“The January gains were broad-based,” said Ted Rossman, credit card analyst, Bankrate.com. “E-commerce, electronics and furniture were the biggest gainers and are all examples of the popular work- and play-from-home trade. However, food services and drinking places had a strong month, too, as did sporting goods and other hobby shops. We even saw signs of life from department stores and clothing retailers, which have lagged for much of the past year.”
Specifics from key retail sectors tracked by the NRF for January are below.
• Online and other non-store sales were up 11% month-over-month and up 22.1% year-over-year.
• Sporting goods stores were up 8% month-over-month and up 22% year-over-year.
• Building materials and garden supply stores were up 4.6% month-over-month and up 13.7% year-over-year.
• Grocery and beverage stores were up 2.4% month-over-month and up 11.6% year-over-year.
• Furniture and home furnishings stores were up 12% month-over-month and up 9.3% year-over-year.
• General merchandise stores were up 5.5% month-over-month and up 7.8% year-over-year.
• Health and personal care stores were up 1.3% month-over-month and up 3.3% year-over-year.
• Electronics and appliance stores were up 14.7% month-over-month, but down 4.1% year-over-year.
• Clothing and clothing accessory stores were up 5% month-over-month, but down 11.3% year-over-year.