The U.S. Department of Commerce announced that seasonally adjusted retail sales were down 0.8 percent in January month-to-month, while unadjusted sales were up 3.3 percent unadjusted year over year, as declining gas prices and auto slowdowns hampered retail growth, according to official Census data, yet the National Retail Federation remains bullish on consumer spending, as well as job growth in 2015.
Gas station sales slipped 9.3 percent in January, while auto dealer sales saw a second straight month of decline as well at 0.5 percent. Food services declined by 0.3 percent, though restaurants and bars saw a slight uptick of 0.8 percent, according to Census statistics. The January retail decline follows a 0.8 percent decline from December, and was worse than an estimated 0.5 percent decline in sales by analysts.
Outside of gas and automobiles, retail picked up by 0.2 percent month-by-month in January, with unadjusted growth of 3.7 percent year over year, according to findings by the NRF. Total retail sales for 2014, excluding gas, automotive and restaurant sales, grew 4.1 percent in 2014, topping the 3.5 percent growth from 2013. Holiday spending growth was also confirmed at 4 percent, per initial NRF estimates. This was the biggest annual growth since 2011, largely due to improving wages, housing prices and equity gains from the stock market. Improving economic conditions, according to the NRF, are also supposed to increase confidence among spenders, which the Commerce Department claims hasn’t been reflected yet in the January figures.
“The economy appears to finally have gained some real traction and after a somewhat turbulent 2014, we expect to see continued gains in economic activity in the year ahead,” said NRF Chief Economist Jack Kleinhenz. “We still, however, have a ways to go in order to achieve sustainable economic growth. There are a few wild cards that the retailers will need to keep an eye on, like global economic growth, energy prices and even inflation.”
The NRF is also projecting GDP growth of 2.7-3.2 percent in 2015, along with 220,000-230,000 new jobs being created each month as unemployment is expected to drop to 5 percent by year’s end.