Consumers are the main source of economic growth and retail sales account for a large part of their spending. Retail Sales in January reportedly fell 0.4% for the U.S. which is, according to Bloomberg News, the largest decline that retail sales has seen in the United States since June 2012. Speculators feel that it could the the bitter cold weather to blame. Ultimately the Department of Commerce figures showed that the 0.4 percent decrease followed a revised 0.1 percent drop in December that was previously reported as an increase.
An economist at RBS Securities Inc. in Stamford, Connecticut, Guy Berger, reported that “It’s not looking good for consumer spending.” In January sales fell in most categories. Purchases have fallen 0.6 percent at furniture outlets and 1.4 percent at retailers of sporting goods, books and music. It has been reported that spending decreased 0.9 percent at clothing chains and 1.5 percent at department stores. McDonald’s Corp., the world’s largest restaurant chain, also reported that sales at its U.S. stores fell for the third straight month in January.
The United States retail sector features the largest number of large, lucrative retailers in the world. According to senior economist Eugenio Aleman at Wells Fargo Securities, “Consumer spending appears to be on shakier ground than when the year started.” There were hundreds of thousands of retail job cuts announced in January. This should be viewed as having significance for the U.S. economy overall. Retail Industry reported that Sears (SHLD), Barnes & Noble (BKS), and Indigo are just some of the retailers that have announced and staged big closings of big iconic flagship stores in prime locations of major shopping destination cities like New York, Toronto and London this month.
However, grocery stores have reported higher sales. Gasoline stations have also reported a 1.1% increase in sales at the pump, according to Market Watch.
The cold weather across much of the nation could have contributed to a drop in retail sales in January. Still, retail sales haven’t fallen for three straight months since the fall of 2008, which was the height of the financial crisis.
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