Retail Sales Fall: Which Way Is The Sector Headed?
Zacks Investment Research | Feb 14, 2018 08:56PM ET
U.S. retail sales registered the steepest decline in almost a year during January. The Commerce Department stated that U.S. retail and food services sales were down 0.3% to $492 billion. The fall was primarily due to lower sales at motor vehicle & parts as well as building material dealers. Per media reports, analysts were expecting a 0.2% increase in sales.
Auto sales declined 1.3% in January, according to the monthly report. Furthermore, home building materials sales declined 2.4%. However, the bright spots were gasoline stations, clothing & clothing accessories and department stores where sales increased 1.6%, 1.2% and 0.8%, respectively. Receipts at service stations increased on account higher gasoline prices. Meanwhile, sales at non-store retailers remained flat but increased 10.2% from the prior-year period.
Why Retail Sector Still Hold Promise?
Although January sales data raises concern, industry experts believe that this may be short lived. In fact, they are of the opinion that gradual wage acceleration, a 17-year low unemployment rate and rising consumer confidence are enough to trigger consumer spending, which accounts for more than two-thirds of U.S. economic activity. Also, the monthly report states that retail sales did increase 3.6% year over year.
All these bode well for the Zacks Investment Research
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