Associated Press Wire

Feb 15, 10:00 AM EST

US retail sales rise in January, led by gas and restaurants


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AP Photo/Gene J. Puskar

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WASHINGTON (AP) -- Americans increased their spending at gasoline stations and restaurants in January, boosting retail sales even though auto buying fell.

Retail sales rose a seasonally adjusted 0.4 percent, down from a solid 1 percent gain in December, the Commerce Department said Wednesday.

Overall sales pulled back from a December bump in holiday shopping online and at auto dealers. But Americans spent more than normally expected last month at clothiers, department stores, electronics outlets and sporting goods retailers.

The gains point to continued economic growth. But they also indicate that improving consumer sentiment after President Donald Trump's presidential election, especially optimism among Republicans, has yet to significantly boost retail sales.

"Sales are growing at a decent clip, but the surge in consumers' confidence since the election is yet to translate into stronger spending," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Higher gas prices drove a 2.3 percent sales increase at service stations last month. Gasoline prices climbed 7.8 percent between January and December, according to a separate Labor Department report released Wednesday. The retail sales report does not adjust its figures for prices.

Purchases at restaurants and bars climbed 1.4 percent. Building materials stores saw a slight 0.3 percent gain.

But sales at auto dealers slipped 1.2 percent, a sharp pull back after jumping 2.9 percent in December.

Sales at non-store retailers such as internet outlets were flat in January, although they have climbed 12 percent over the past year as more Americans prefer to shop via their computers and phones.

Over the past 12 months, total retail sales have risen a solid 5.6 percent. The greater spending likely reflects the improving job market. Employers added 227,000 workers in January, while the unemployment rate ticked up slightly to 4.8 percent because more people started looking for jobs and were counted as unemployed.

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