Retail sales grew at a glacial pace last month, as winter storms kept shoppers snowbound.
Sales rose 0.3% in January from the previous month to $381.57 billion, the Commerce Department said Tuesday. That was the smallest gain since June.
"If you take the numbers literally, they imply a slowing of consumption [growth], but I think inevitably the numbers reflected snowstorm effects," said MF Global economist Jim O'Sullivan.
Paul Dales, an economist at Capital Economics, said it would be hard to know how much of the slowdown in sales growth was due to weather until next month, when February figures come out. If those show a big sales jump, it will be clear that January's weakness was caused largely by the snowstorms.
"That said, I think even stripping out those weather effects there might be a slowdown in consumption [growth] going on," said Mr. Dales. Sales growth has decelerated for each of the past three months, he noted—a sign that, with unemployment still high and many household balance sheets still in need of repair, consumers may not be able to increase their spending by very much for very long.
Let's take a look at the data.
Retail sales rose strongly in the spring of 2010, leveled off during the summer and have been rising strongly since. A high savings rate (which is currently at about 5%) is helping were fuel consumption.
On a five year chart of real retail sales, notice that sales bottomed during most of 2009 but have been rising since.
Looking at the specifics, auto sales increased .5% and have been increasing at solid rates for the last year:
Housing issues played a large negative role. Furniture and home furnishing sales decreased .3% while building material and supplies decreased 2.9%. This second figure led many to conclude that weather played a significant role in the decline. After all, who wants to build or fix a home in freezing weather?
Some economists argued we're seeing a slowing in retail sales. I don't think there is enough data yet to make that call conclusively. The slower increase could simply be a natural slowing down from a robust Christmas.
Overall, this is still a decent report that indicates the consumer is more willing to spend, helping to push the economy forward.