U.S. Retail Sales Increase in January

Retail sales rose by 0.2% m/m in January. This follows December’s upwardly revised gain of 0.2% . Excluding autos and gasoline, sales were up an even stronger 0.4% m/m.

Consumers appear to be finally dipping into some of their accumulated savings from a year’s worth of low gasoline prices and rising wages. Indeed, spending on clothing, electronics, non-store retailers, and miscellaneous products — typically considered discretionary spending — jumped out of contractionary territory indicating improved consumer sentiment.

The report indicates a solid first-quarter performance of personal consumption expenditures, which should help lift GDP growth above the 2% mark. Going forward, we expect this strong performance to continue in the coming months, with an increasingly healthy labor market supportive of consumer spending.​