January retail sales demonstrated that consumers last month were focused on buying necessities more than discretionary items, according to the National Retail Federation (NRF). Retail industry sales for January (excluding automobiles, gas stations and restaurants) rose 2 percent unadjusted over last year and 0.1 percent seasonally adjusted from December.
January retail sales released today by the U.S. Commerce Department show total retail sales (including non-general merchandise categories such as autos, gasoline stations and restaurants) increased 0.3 percent seasonally adjusted from last month and 4.6 percent unadjusted year-over-year.
“The January numbers are indicative of the issues consumers are facing, including the housing slump, a sluggish employment sector and high energy prices,” said NRF Chief Economist Rosalind Wells. “We expect to see marginal improvements in the second half of the year once consumers begin to receive their rebate checks.” More on those checks in a moment.
Helped in part by winter clearance sales and other weather-related purchases, sales at clothing and clothing accessories stores increased 1.4 percent unadjusted year-over-year and 1.4 percent seasonally adjusted month-to-month. Health and personal care stores sales also saw moderate increases, with sales increasing 3.5 percent unadjusted over last year and 0.8 percent seasonally adjusted from December.
General merchandise stores sales increased 3.5 percent unadjusted year-over-year and 0.1 percent seasonally adjusted month-to-month.
Stores selling home-related merchandise saw the biggest sales declines.
Sales at furniture and home furnishings stores decreased 4.3 percent unadjusted over last year and 0.5 percent seasonally adjusted from last month. Building material and garden and equipment stores sales decreased 5.8 percent unadjusted year-over-year and 1.7 percent seasonally adjusted month-to-month.
Regarding those tax rebates that congress will give out in the spring, a new survey finds that many families are planning to both spend and save when the checks are distributed.
Consumers plan to spend 40.6 percent of tax rebate checks, according to the NRF, which says that this will provide an immediate $42.9 billion boost to the economy. The survey also found that the money distributed in tax rebates will be used to pay down debt ($30 billion), saved ($19.8 billion), invested ($4.4 billion) and used to pay down medical bills ($4.6 billion).
“Tax rebate checks should have the desired effect of both bolstering the economy in the short-term and putting consumers in a better position to spend for the future,” said NRF President and CEO Tracy Mullin. “This stimulus package is a crucial component to economic recovery and will provide much-needed relief to American shoppers.”
While women will spend a larger percentage of their rebate check than men (43.6 percent vs. 37.3 percent), both genders plan to set aside the same percentage for savings (18.7 percent). Young adults aged 18-24 will spend more of their checks (46.2 percent) than any other age group.
BIG research conducted the survey for the NRF.