Retail sales unexpectedly rise, easing recession worries

Source: Exec Digital USA

Date :13/02/2008 06:21:16

Sales at retailers unexpectedly rose 0.3 percent in January, partly reflecting stronger sales of new cars and gasoline, easing concerns that the US has already slipped into a recession.

January's sales increase followed a 0.4 percent decline in December and was contrary to Wall Street analysts' forecasts for a 0.2 percent decline, according to a Commerce Department report on Wednesday.

Prices for U.S. debt securities fell while the dollar's value strengthened against other major currencies.

Excluding autos, January sales still rose 0.3 percent, reversing a 0.3 percent decline in December sales. Wall Street analysts were expecting a 0.2 percent gain in sales excluding autos.

Recession ease

"The data is clearly a surprise to the upside," said Omer Esiner, a market analyst with Ruesch International in Washington, D.C. "In the near term, it does ease some recession concerns."

Sentiment

Despite the higher headline number for sales, there were declines in many categories that implied consumer spending is tightening. Furniture sales fell 0.5 percent in January, building material sales were down 1.7 percent and department store sales declined by 1.1 percent.

Elsewhere, gasoline sales rose two percent in January after being flat in December. Despite this, analysts said that likely reflected higher prices, not stronger demand. Excluding gasoline, January retail sales rose 0.1 percent.

February 13, 2008