January 2015 Retail Sales

Retails sales dropped for a second consecutive month in January 2015 according to the Census Bureau.  After falling 0.9 percent in December, 0.8 percent fewer dollars were spent on retail wares to start the year.  As was the case in the previous period, falling gasoline prices played a significant role in the drop.  Despite significantly lower pump prices versus a year ago, retail sales were still up 3.3 percent from January 2014.

Removing volatile components (gasoline and automobiles) yields a better tally.  Month-over-month, this figure has increased 0.2 percent.  Areas of monthly growth include electronics and appliance stores, building materials, health & personal care, and general merchandise.  Atlas likes to look at eating and drinking out figures to get a sense of the consumers’ collective attitude toward discretionary spending; once again, additional money was spent eating away from home.  If the economy were to hit the skids, this should be one of the first areas to suffer since it can be easily substituted by dining at home.  For now, that is not on the menu.

Retail sales are trending higher, and the virtuous cycle of our current expansion should support further growth.  As the number of employed people grows, this indicator should be a direct beneficiary since the newly employed will begin spending their paychecks.  Economic utopia this is not, but America’s expansion is continuing as evidenced in the retail portion of the nation’s output.            (by C. Cox)