Spending has leveled off in the beginning of the year due in part to severe winter weather in much of the country, according to the National Retail Federation.
January retail sales (excluding automobiles, gas stations and restaurants) were flat seasonally adjusted month-to-month yet increased 3.0 percent unadjusted year-over-year.
“Following a solid holiday sales season, it seems that many consumers decided to take a break from the stores and shopping malls this January in an attempt to avoid winter weather,” says Matthew Shay, president and chief executive officer, NRF. “While the dip in retail sales was somewhat anticipated, it is concerning that both jobless claims came in above projections and that consumer spending were flat in January–it’s not the way to kick off a new year.”
January retail sales, released today by the U.S. Census Bureau (which include categories such as automobiles, gasoline stations and restaurants) decreased 0.4 percent seasonally adjusted month-to-month yet increased 2.6 percent adjusted year-over-year.
“Harsh winter weather is masking the performance of the broader economy,” says Jack Kleinhenz, chief economist, NRF. “Extreme temperatures and severe ice and snow are making it increasingly difficult to assess if the retail sales slowdown is temporary or a telling sign of a longer lasting weakness in the consumer-fueled economy. No one can jump to any solid conclusion until we shovel out of the snow.”
The NRF is projecting a 4.1 percent increase in retail sales for 2014 as a whole. Click here for more details on the NRF’s annual economic forecast.