US retail sales bounced unexpectedly in January, according to government data, but economists say consumer spending is likely to remain sluggish as the job market worsens.
The Commerce Department said retail sales rose 1 percent last month from December’s dismal levels – reversing half a year of month-to-month declines and outstripping economists’ forecasts for a 0.8 percent drop.
Sales were driven partly by steep discounting on post-Christmas merchandise and a rise in gasoline prices.
But January also drew some of its surprising strength at the expense of November and December, whose results were revised downward by the government.
As shoppers grappled with job losses, a stumbling housing market and tight credit, the holiday season * was the weakest in nearly 40 years of record keeping, according to the International Council of Shopping Centers.
BNP Paribas now estimates that the US economy shrank a wrenching 5 percent during the fourth quarter – worse than the government’s previous estimate of a 3.8 percent contraction.
“This is not the kind of news that we can pop champagne over,” said George Belch of San Diego State University, noting that January’s sales plunged 9.7 percent from year-ago levels.
Consumer confidence continues to drop, and the job market is in free fall, he added.
Separately yesterday, the Labor Department said the ranks of those who remained unemployed after drawing an initial week of aid rose by 11,000 to a record 4.81 million.
On the bright side, there were signs of stabilizing auto prices. Sales of autos and parts rose 1.6 percent.
Meanwhile, Internet retailers and mail-order catalogs posted a 2.7 percent increase in January – the strongest gain among 13 categories tracked by the government – as shoppers hunted for bargains online.
Amazon.com recently touted its “best ever” holiday season, although critics noted its sales were more impressive than its profits.
