Retail Sales in U.S. Rise, Below Forecasts
Sales at U.S. retailers rose less than forecast in January, reflecting an unexpected drop in purchases of automobiles.
The 0.4 percent gain reported by the Commerce Department today in Washington was half the 0.8 percent rise median forecast of economists surveyed by Bloomberg News. Purchases excluding car dealers climbed 0.7 percent, more than projected and the biggest gain since March.
Retailers like Target Corp. (TGT) and Limited Brands Inc. topped analysts’ sales forecasts last month, when many companies offered incentives to bring back shoppers after holiday sales stagnated. Further gains in employment are needed to bolster wages and underpin confidence, ensuring that demand can be sustained.
“Consumers are being very picky at this point,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “We saw aggressive retailer discounting and sharp price cuts in the new year. It bodes poorly for retailers’ margins.”
Purchases were also revised down 0.1 percentage point in each of the prior two months -- to unchanged in December and a 0.3 percent rise in November. Stagnant yearend sales prompted economists at Morgan Stanley to trim their tracking estimates for consumer spending in the fourth quarter and first three months of 2012.