January Retail Sales - Mixed at Best

U.S. retail sales came in mixed in January. The economy experienced healthy year-over-year growth but suffered a larger than anticipated monthly decline.  Coming off what was a strong December, consumers pulled back in January.  Severe weather and the LA fires weighed on consumer spending.

• Real (inflation adjusted) retail sales advanced 1.0% year-over-year.  In January, retail sales grew 4.2% nominally netting growth of 1.2% after adjusting for 3% inflation.  Higher spending at motor vehicles & parts dealers (+6.4%) and misc. store retailers (+5.8%) was partially offset by lower spending at sporting goods, hobby, musical instrument & bookstores (-4.1%).  Eight of thirteen categories advanced in real terms.
• Real (inflation adjusted) retail sales declined -1.4% month-over-month.  In January, nominal retail sales levels fell -0.9% compared to December (consensus -0.1%).  The decline in sales is even starker after adjusting for the 0.5% inflation.  Sales declined in most categories, with spending at sporting goods, hobby, musical instrument & bookstores (-4.6%) and motor vehicle & parts dealers (-2.8%) representing two of the largest detractors.  Conversely, gas stations and food services & drink places posted positive real growth.  Only two of the thirteen categories increased in real terms.