January retail sales up 5.44%, consumer confidence falls

Consumer spending in January was down from the robust pace in December but still posted a 5.44% gain when compared with January 2024, according to the National Retail Federation (NRF) Retail Monitor.

NRF CEO Matthew Shay said overall spending, excluding automobiles or fuel, by “choiceful and value-conscious consumers” supported the year-over-year gain with a 1.07% dip from the December results.

“The year-over-year increase reflects overall consumer strength as a strong job market and wage gains above the rate of inflation continue to support spending,” Shay said.

The Retail Monitor calculation of core retail sales – excluding restaurants, automobile dealers, and gasoline stations – was down 1.27% month over month in January but up 5.72% year over year. The core sales were up 8.41% year over year in December.

The report is not adjusted for inflation, and the U.S. Bureau of Labor Statistics (BLS) reported that prices of all goods rose 2.9% in December. Excluding food and fuel, consumer prices were up 3.2% year over year. Consensus estimates for January consumer price index (CPI) are 2.9% higher than a year ago. BLS will report CPI on Feb. 12.

U.S. consumer confidence declined by 5.4% in January, according to The Conference Board.

“Consumer confidence has been moving sideways in a relatively stable, narrow range since 2022. January was no exception. The index weakened for a second straight month, but still remained in that range, even if in the lower part,” said Dana Peterson, chief economist at The Conference Board.

Peterson said consumers were also less optimistic about future business conditions and, to a lesser extent, income.

“The return of pessimism about future employment prospects seen in December was confirmed in January,” she said.

January sales were up in seven out of nine categories on a yearly basis, led by online sales, health and personal care stores, and clothing and accessories stores. Following are specifics on the annual gains from key sectors.
• Online and other non-store sales, up 30.49%
• Health and personal care stores sales, up 10.39%
• Clothing and accessories stores sales, up 7.67%
• General merchandise stores sales, up 7.53%
• Grocery and beverage stores sales, up 5.65%
• Sporting goods, hobby, music and bookstore sales, up 2.82%
• Electronics and appliance stores sales, up 1.57%
• Furniture and home furnishings stores sales, down 0.27%
• Building and garden supply stores sales, down 0.99%