US retail sales slow, regional factory gauge rises

WASHINGTON: Sales at US retailers slowed in January as extreme weather in large parts of the country kept some shoppers at home, but the underlying tone remained firm. Total retail sales rose 0.3 percent, the Commerce Department said on Tuesday, advancing for a seventh straight month. Sales rose 0.5 percent in December. Economists polled by Reuters had expected retail sales to increase 0.6 percent last month. Compared to January last year sales were up 7.8 percent. "Seventy percent of the country was covered by snow in January so, if anything, it's a miracle the consumer didn't just hibernate," said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York. Economists also noted that sales were taking a breather after recent hefty gains and expected the upward trend to resume, which should further spur the economic recovery. Robust consumer spending powered the economy in the fourth quarter, which grew at a 3.2 percent annual rate. US stock index futures edged lower after the data on Tuesday, while government debt prices pared losses. The US dollar trimmed gains versus the yen. CORE SALES UP 0.5 PCT Excluding autos, sales increased 0.3 percent last month, below economists' expectations for a 0.5 percent gain, after rising 0.3 percent in December. Sales last month were held back by a 2.9 percent drop in receipts at building material and gardening outlets after rising 1.8 percent in December. Sales at food services and drinking places fell 0.7 percent, while receipts at clothing and clothing accessories stores slipped 0.3 percent. But so-called core retail sales, which exclude autos, gasoline and building materials, and increased 0.5 percent after slipping 0.1 percent in December. Core sales correspond most closely with the consumer spending component of the government's gross domestic product report. Consumer spending, which accounts for 70 percent of US economic activity, increased at a 4.4 percent annual rate in the fourth quarter. A separate report from the New York Federal Reserve showed a gauge of manufacturing in New York State climbed to 15.43 in February, the best since June and up from 11.92 in January. Economists polled by Reuters had expected a reading of 15.00. The report was the latest to the manufacturing sector remains strong, even as the inventory rebuilding cycle starts to wind down.