The numbers: A month after the biggest decline in 10 years, sales at U.S. retailers rebounded slightly in January, but not enough to alter an emerging picture of an economy that slowed sharply at the beginning of 2019.
Retail sales rose 0.2% in January, led by home centers and Internet stores, according to a government report delayed by the partial federal shutdown earlier this year. Economists polled by MarketWatch had forecast a 0.1% increase.
Sales had tumbled a revised 1.6% in December, the largest drop since late 2009, just as the U.S. was exiting the 2007-09 recession. The government originally had reported a 1.2% decline.
What happened: If auto and gasoline are omitted, retail sales in January rose a much headier 1.2%.
Auto dealers saw a 2.4% drop in sales, mainly because of steeper discounts and fewer sales to other businesses such as rental companies. Gas stations reported a 2% decline as the cost of oil fell — a good thing for American households.
Stores that sell clothing and home furnishing also recorded lower sales.
On the brighter side, sales surged 3.3% at home centers such as Home Depot
Internet retailers led by Amazon
also posted a 2.6% increase in sales.
Restaurants, pharmacies, grocers and stores that sell sporting goods and hobby items also boosted sales.
The even bigger drop in sales in December, meanwhile, is still viewed with suspicion by many economists in light of other retail-industry reports such as Redbook that suggest sales were much better than the government reported.
Big picture: The U.S. economy has slowed in early 2019, but not ground to a halt. While the rebound in sales in January is mildly encouraging, many other signposts such as the weak 20,000 increase in hiring in February suggest the soft patch isn’t over.
What they are saying?: “What went down did come back up again, just not far enough,” said economist Katherine Judge at CIBC World Markets.
Market reaction: The Dow Jones Industrial Average
traded lower streak, weighed by shares of Boeing Co.
after one of its newest commercial aircraft was involved in a deadly crash.
The 10-year Treasury yield
was flat at 2.65%. Many loans such as mortgages and auto loans are tied to changes in the 10-year note, whose yield has fallen from a seven-year high of 3.23% in October.