Retail Sales Could Have Been Worse, If Not for Beer
Consumer spending got off to a sluggish start in the new year, but strong spending at restaurants and drinking establishments has helped temper that trend.
The slowdown may very well be temporary amid strong payroll gains and high consumer confidence, notes Ted Cangero, senior research analyst at the American Institute for Economic Research.
According to a report released this morning by the Commerce Department, sales declined 0.8 percent in January, after a 0.9 percent decrease in December. However, over the past year, sales have still increased a solid 3.3 percent.
Within the report, details were mixed. Discretionary spending (not including autos) was up 0.2 percent, led by robust gains by food service and drinking places. Restaurants and drinking establishments saw gains of 13.5 percent over the last three months, and 11.3 percent over the last year.
But lower gasoline and food sales pushed down spending on staples by 3.1 percent in January. In recent months, gasoline prices have fallen precipitously, and food prices have registered a modest decline. The sales numbers are adjusted for seasonal ebb and flow of business, but not price changes. Therefore declining prices result in lower dollar sales.
A bright spot in spending on staples was health and personal care stores, which increased 0.2 percent in January, and have increased 3.8 percent over the past 3 months and 6.6 percent over the past 12 months.