Retail Sales in U.S. Increased During January

An increase in retail sales during January marked the third consecutive month of increases as Americans started the new year by spending more freely on vehicles, online merchandise and clothes.

The gain of 0.2% matched the advance of the previous month that was reported initially as a decline, reported the Commerce Department Friday.

The average forecast called for an increase of 0.1% for January. Excluding less expensive gasoline, which pulled down receipts at service stations, purchases were up 0.4%.

Better job security, improved increases in wages and dropping gas prices might be what has persuaded more consumers to spend more after a slowdown in the fourth quarter.

An uptick in the amount of household purchases, which represents the largest share of the economy, would help the economy in the U.S. to stave off negative effects of a strong dollar, sluggish demand internationally and financial markets that have been tumultuous.

Estimates in a survey of economists range from a drop in retail sales of 0.5% to a gain of 0.4%. December retails sales increased by 0.2% after being revised, as they were reported previously as a drop of 0.1%.

The figures for retail used to calculate the U.S. gross domestic product, which excludes groups such as auto dealers, service stations, home improvement stores and food services, was up 0.3% during January, which is the most since last May after dropping 0.3% the prior month.

Economists are looking to see an increase in spending by consumers to help boost growth during the current quarter after the growth slowed to almost nothing near the end of 2014.

The GDP slowed near a crawl at an annualized rate of 0.7% during the last three months of the year as business adjusted their inventories and pulled back on their capital investments.

Eight of the 13 major categories saw increases in demand during January from the previous month, showed retail figures.

Purchases made on the Internet climbed by over 1.6%, which was the most in the past 11 months. Sales at outlets of general merchandise increased by 0.8% the largest advance since May of 2015.

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