Commerce Dept: January Sales Drop Even More Than Expected

snow

Snowed in Northern New Jersey

New York—The snow, ice and frigid winds buried more than homes, buildings, cars etc. last month. According to data released today by the U.S. Department of Commerce, January sales tumbled more than expected.

Total sales fell 0.4% last month from December, marking the biggest drop in 18 months. Economists had predicted a 0.1% drop in overall January retail sales and a 0.1% rise in sales excluding autos.

So-called core retail sales, which exclude autos, gas, building materials, fell 0.3% compared with forecasts for a 0.2% increase. Yet compared with January 2013, there was a 2.6% increase adjusted year-over-year.

Sales of clothing and “clothing accessories” decreased 0.9% but increased 1.2% unadjusted year-over-year.

Others showing declines included department stores (down 1.5%) sporting goods (down 1.4%) and non-store retailers (online) down 0.6%.

November/December Revised Down

Meanwhile sales by building materials and supplies dealers jumped by 1.4&, while sales by gas stations increased by 1.1%.

Analysts had expected a decline in January sales, but the weather not only hindered retail sales, it also dampened leading indicators about where retail, and the U.S. economy in general is headed.

“Harsh winter weather is masking the performance of the broader economy,” NRF Chief Economist Jack Kleinhenz said. “Extreme temperatures and severe ice and snow are making it increasingly difficult to assess if the retail sales slowdown is temporary or a telling sign of a longer lasting weakness in the consumer-fueled economy. No one can jump to any solid conclusion until we shovel out of the snow.”

Noted Peter Bookvar, managing director at Lindsey Group, “Overall, it still leads us to more mixed data where we may just have to wait for the snow storms to stop in order to glean what’s real and what’s the impediment of weather.”

Noting the continued winter storms that already have hit much of the nation this month, Credit Suisse analysts said, “February does not offer much hope for relief.”

In addition to today’s report, the Commerce Department revised downward retail sales for the prior two months. Instead of advancing 0.2% in December, as previously estimated, sales declined 0.1% that month, officials said. Revised data showed that overall retail sales fell by 0.1% in December, instead of the initially reported 0.2% increase, due to weak car sales. Excluding autos, sales were up 0.3% in December.

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com