Disappointing US retail sales figures hit markets

Tuesday 14th February 2012

US citizens cutting down on online shopping and postponing car purchases have hit the US retail sales figures making them undershoot economic predictions.

Total retail sales increased 0.4% after being flat in December, the United States Department of Commerce said late yesterday. Economists polled by Reuters had forecast retail sales climbing 0.7% last month.

Signs that the job market is picking up and manufacturing is rising have lessened the fears in recent weeks of a sharp slowdown in the US economy.

The National Federation of Independent Business said yesterday that confidence among small US business owners hit a four year-high in January.

The US government had initially overestimated the rise in retail sales and revised its expectation downwards, suggesting it had misread the data and that consumers did not spend as much as previously thought during the holiday shopping season.

Sales of cars and autoparts dropped 1.1% in January, while shopping at “nonstore retailers”, a category dominated by online sales, also fell 1.1%, the biggest decline since March 2009.

The US retail sales figures for January were boosted by seasonally increased spending at gasoline stations, up 1.4% and the biggest gain since March 2011, while receipts for electronics increased 0.5%.

With signs that the US economy is strengthening, a Reuters poll of economists showered many thought there was a “good chance” the Federal Reserve will raise interest rates before the end of 2014.

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