Retail sales rose .1% in January to $416.6 billion. This was a healthy 4.4% gain over last year. The biggest contributor ($70.9 billion) continues to be auto sales, a 9.4% increase. Another strong contributor ($39 billion) is online sales, up 15.7% from January 2012.
Auto sales benefited from record-low interest rates, as did furniture stores, which 3.2% over last year. However, this only contributed $8 billion to total U.S. retail sales.
Nearly all other retail categories had stronger sales this January than last. Here's a summary, from most gain to least:
- Sporting goods and hobby stores -- 7%.
- Clothing stores -- 4.4%.
- Restaurants and bars -- 6.5%.
- Grocery stores -- 2.9%
- Electronics and appliance stores -- 1.3%.
- Gas stations -- .8%
Only two sectors did poorly. Health and personal care stores were down .9%. Department stores continued their declining trend, losing .6% in business. These could have also been because of sales and lower prices. The Commerce Department's survey reports total sales, so the effects of inflation or, in this case deflation, will show up in the retail report. (Source: U.S. Commerce Dept, U.S. Retail Sales February 13, 2013)
What It Means to You
Department stores are still having trouble competing against the low prices of discounters, the customer service of specialty stores and the convenience of online shopping. Therefore, take advantage of department stores' demise by shopping their sales which can sometimes be 70% off. The Fed's quantitative easing program will continue to benefit auto, furniture and electronics shoppers by keeping interest rates low for this year. As the economy continues to improve, interest rates will rise probably by next year. Therefore, take advantage of these rates now while you can.