WASHINGTON - Retail sales rose less than forecast in January, showing it will be difficult for consumers to sustain last quarter's boost in spending without bigger gains in employment.
Purchases increased 0.3 percent, the smallest gain since a drop in June, according to Commerce Department figures Tuesday in Washington.
Other reports showed manufacturing in the New York area accelerated and confidence among homebuilders stagnated.
The sales data also indicated winter snowstorms may have played a role in the slowdown as Americans stayed away from restaurants and home-improvement stores.
While Gap and Macy’s were among retailers topping analysts’ estimates as promotions lured post-holiday shoppers, rising food and gasoline prices may have caused households to cut back on non-essentials.
“There is some momentum in consumer spending, but it’s not particularly robust,” said Kevin Logan, chief U.S. economist at HSBC Securities USA in New York, who correctly forecast the gain. “Things are recovering, but they’re not really healthy,” he said. In addition, “the severe weather last month curtailed all kinds of outdoor activity.”
Sales were projected to increase 0.5 percent based on the median forecast of 79 economists in the Bloomberg News survey. Estimates ranged from a gain of 1.1 percent to a drop of 0.5 percent. The December increase in sales was revised down to 0.5 percent from the 0.6 percent previously estimated.
Federal Reserve policy makers are among those saying bigger gains in employment are needed to ensure American consumers sustain spending. While unemployment fell to 9 percent in January, from 9.4 percent in December, it has been 9 percent or higher since May 2009, the longest period of elevated joblessness since monthly records began in 1948.
Eight of 13 major retail categories showed an increase in demand last month, led by auto dealers, grocery stores and service stations, according to the Commerce Department’s figures. Filling station sales advanced 1.4 percent.
The data, which aren’t adjusted for inflation, may have been boosted by rising gasoline prices. Regular fuel in January reached an average $3.10 a gallon, according to AAA, the nation’s biggest motoring organization.
Sales climbed 0.5 percent at automobile dealers, consistent with industry figures that showed car purchases climbed last month to a 12.54 million unit annual pace that was the best since the government’s cash-for-clunkers program in August 2009.
Demand dropped 2.9 percent at building-material stores, the most since May, and restaurant receipts dropped 0.7 percent, the biggest decrease since March 2009. In contrast, the 1.3 percent gain at grocery stores was the biggest since August.