Feb. 13 (Bloomberg) -- Retail sales in the U.S. rose in January for a third consecutive month as labor market progress helped Americans overcome an increase in the payroll tax.
The 0.1 percent climb followed an unrevised 0.5 percent increase in December, Commerce Department figures showed today in Washington. The advance matched the median forecast of 80 economists surveyed by Bloomberg.
Retailers such as Gap Inc. and Target Corp. are getting a sales boost as job gains support household disposable income, helping to counter the effects of the higher payroll levy in January. Firming property values and rising stock prices are also bolstering consumers and adding traction to purchases that make up about 70 percent of the economy.
“Consumers held up a little bit better than people were expecting, considering the rise in payroll taxes,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. Price is the second-best retail sales forecaster in the past two years, according to data compiled by Bloomberg. “We’ve been seeing pretty good, though certainly not robust, employment growth. That’s providing consumers with the income fuel that they need to maintain their spending.”
Estimates in the Bloomberg survey ranged from a drop of 0.7 percent to a gain of 0.6 percent.
Six of 13 major categories showed gains last month, led by a 1.1 percent jump at general merchandise stores that was the biggest gain since April 2011. Demand at sporting goods merchants and non-store retailers, which include internet outlets, also advanced.
Demand at auto dealers fell 0.1 percent in January from the prior month, in line with industry data issued earlier this month. Cars and light trucks sold at a 15.2 million annual rate in January after 15.3 million in December, according to data from Ward’s Automotive Group. Including November’s 15.5 million rate, auto sales over the past three months have been the strongest in five years.
Demand for automobiles as consumers replace older cars and trucks is benefiting automakers such as Ford Motor Co. and General Motors Co. Ford’s deliveries surged 22 percent last month compared with January 2012 and General Motors sales climbed 16 percent, the companies reported Feb. 1.
Retail sales excluding autos increased 0.2 percent after rising 0.3 percent in December, today’s report showed. They were projected to rise 0.1 percent, according to the Bloomberg survey median.
Same-store sales for the more than 20 companies tracked by researcher Retail Metrics Inc. surged 4.5 percent in January from the same month in 2012, the biggest year-to-year gain since September 2011.
San Francisco-based Gap, the largest U.S. apparel chain, posted an 8 percent gain in sales, double the average estimate of 4 percent in a survey by Retail Metrics. Minneapolis-based Target, the second-largest U.S. discounter, posted a gain of 3.1 percent, above projections of 1.7 percent.
Purchases excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, climbed 0.1 percent after increases of 0.7 percent in each of the previous two months. The readings for December and November were revised up from prior estimates indicating consumer spending in the fourth quarter may be stronger than previously estimated.
Household purchases rose at a 2.2 percent annual rate from October through December, up from a 1.6 percent pace in the previous three months, according to figures from the Commerce Department. Today’s revisions, combined with a smaller trade deficit than previously reported, probably means the economy managed to grow at the end of last year.
The fiscal pact passed by Congress on Jan. 1 avoided sweeping tax increases and made permanent George W. Bush’s income-tax cuts for 99 percent of Americans. At the same time, the agreement let the payroll tax used to pay for Social Security benefits return to the 2010 level of 6.2 percent, from 4.2 percent. A worker earning $50,000 a year is taking home about $83 less a month because of the higher levy.
Additionally, the Internal Revenue Service did not begin accepting and processing 2012 returns until Jan. 30, later than its original Jan. 22 electronic filing start date, due to Congress’ last-minute Jan. 1 tax deal. That, combined with the IRS’s efforts to prevent fraud, may slow refunds.
Steady progress in hiring may ease the pressure on household budgets. Employers added 157,000 workers to payrolls in January after a revised 196,000 rise the prior month and a 247,000 surge in November, Labor Department data showed Feb. 1. Revisions added a total of 127,000 jobs in the last two months of 2012.
Confidence among American consumers rose in the week ended Feb. 3 for the first time this year. The Bloomberg Consumer Comfort Index climbed to minus 36.3 from minus 37.5 the prior period, which was the weakest since early October.
A strengthening stock market also may boost consumer sentiment and spending. The Standard & Poor’s 500 index climbed 5 percent in January, its biggest gain for the month since 1997. The S&P 500 has rallied for six straight weeks, closing on Feb. 8 at the highest level since November 2007.