ARLINGTON, Va.—Total retail sales increased 0.2% in January. NAFCU Chief Economist and Vice President of Research Curt Long noted that wage growth will be a key factor to watch regarding overall consumer spending and economic activity in 2019.
"Consumer spending bounced back in January after a dismal end to 2018," said Long in a NAFCU Macro Data Flash report. "Although the headline sales figure rose only 0.2%, it was held back by lower gas prices. Excluding auto and gas sales, core sales increased 1.2% on the month. However, the Census Bureau made downward revisions to both November and December core sales.
"Taken together, core sales have been flat over the past three months. Most early estimates of first-quarter GDP project a slowdown from the pace of economic growth at the end of 2018," he added.
Big Gains in Sporting Goods
According to the Census Bureau, December's sales growth was revised downward from -1.2% to -1.6%. November's sales were also revised downward from a 0.1% gain to flat growth.
Results among the major retail segments were mixed in January. The biggest gains were in sporting goods and hobby stores (+4.8%), building supply stores (+3.3%) and nonstore retailers (+2.6%). The largest declines during the month were among motor vehicle and parts dealers (-2.4%), gas stations (-2%) and clothing stores (-1.3%).
"Wage growth has been strengthening and will be an important measure to watch, as it could support a rebound in consumer spending and in overall economic activity over the remainder of the year," Long concluded.