Retail sales in the United States rose more than anticipated in January as consumers purchased electronics and household products. This is indicative of a domestic demand which will foster economic growth in the months ahead.
With the exception of automobiles, fuel products, building materials and food services, retail sales were up .4% in January.
Consumer spending is up this year as unemployment drops. As the labor market improves, wage growth has as well, prompting several interest rates from the Federal Reserve this year.
Interest rates were raised in December of 2016, and the Fed has announced at least two more increases in 2017.
The increase in sales manifested over several markets.
- Electronics and appliance store sales rose 1.6%, after a decline of 1.1% in December.
- Building materials stores saw a .3% increase in sales.
- Clothing stores sales increased 1%, which is the biggest increase in nearly a year.
- Department stores saw sales increase by 1.2%, the largest increase in over a year.
- Restaurants and bars enjoyed 1.4% increases in sales
- Hobby and sporting stores also saw growth, up 1.8%
- Online retailers sales remained unchanged.
Department store sales have been experiencing decreases in revenue lately, due to the growth and success of online retailers such as Amazon.com and eBay. The shift to ecommerce has led to the closure of several stores and brands, including Macy’s, Sears and Abercrombie & Fitch.
Automobile dealerships also saw a decrease in sales. After a 3.2% increase consistent with December’s holiday sales, receipts fell 1.4% in January. This is the biggest drop retailers in this industry have seen in 10 months.
The upcoming raises in interest rates by the Federal Reserve is expected to affect consumer spending.