Feb. 13 (Bloomberg) -- Retail sales in the U.S. declined in January by the most since June 2012 as inclement weather kept consumers away from auto showrooms and stores.
The 0.4 percent decrease followed a revised 0.1 percent drop in December that was previously reported as an increase, Commerce Department figures showed today in Washington. The median forecast of 86 economists surveyed by Bloomberg called for no change. Sales excluding automobiles were unchanged.
Some Americans stayed closer to home, limiting trips to car dealerships and malls, as colder-than-normal temperatures and snowfall gripped parts of the nation. Job growth and wage gains the last two months also slowed, indicating consumers may have trouble maintaining the pace of spending after the fastest increase in three years in the final quarter of 2013.
“It’s not looking good for consumer spending,” said Guy Berger, U.S. economist at RBS Securities Inc. in Stamford, Connecticut, and the top forecaster for retail sales over the last two years, according to data compiled by Bloomberg. “Even if you have some modest improvement in the pace of employment growth, that’s not enough to generate a huge improvement in income.”
Estimates in the Bloomberg survey ranged from a decline of 0.5 percent to a 0.4 percent gain. The reading for the prior month was revised from an initially reported 0.2 percent increase.
The decrease in January sales is among reasons why economists at Credit Suisse today reduced their first-quarter growth forecast to 1.6 percent from 2.6 percent.
Another report showed more Americans than forecast filed applications for unemployment benefits last week, underscoring the uneven progress in the labor market. Jobless claims increased by 8,000 to 339,000 in the week ended Feb. 8, a Labor Department report showed today in Washington. The median forecast of 52 economists surveyed by Bloomberg called for a decrease to 330,000.
Stocks rose, after equities snapped a four-day rally yesterday. The Standard & Poor’s 500 Index increased 0.3 percent to 1,823.77 at 11:24 a.m. in New York.
January was the coldest in three years, with snowfall almost four times above normal, according to weather-data provider Planalytics Inc. That followed the coldest December since 2009 with snowfall 21 percent above normal.
Nine of 13 major categories showed sales declines last month, led by auto dealers, sporting goods stores and apparel outlets, today’s retail report showed.
Sales slumped 2.1 percent at automobile dealers, the most since October 2012, after a 1.8 percent decrease the prior month.
Automakers said adverse weather depressed vehicle deliveries, which have been a bright spot for consumer spending in this expansion. Cars and light trucks sold at a 15.2 million annualized pace in January, slowing from a 15.3 million rate in December that had helped cap the best year for the industry since 2007, according to Ward’s Automotive Group.
Sales slid 12 percent for General Motors Co. and 7.5 percent for Ford Motor Co., the two largest U.S. automakers, while Toyota Motor Corp. and Honda Motor Co. also reported lower U.S. sales than analysts estimated.
“January got off to a pretty slow start with really inclement weather in the heartland of the country, all the way down into Texas,” John Felice, U.S. sales chief for Dearborn, Michigan-based Ford, said on a Feb. 3 conference call. “As things improved around the country mid-month, we saw a bounce- back in demand and sales, which was encouraging. Then, sadly, the last week of the month we saw again another arctic blast.”
Retail sales excluding autos were unchanged after a 0.3 percent gain in December that was weaker than initially reported, today’s data showed.
Spending decreased 0.9 percent at clothing chains and 1.5 percent at department stores, today’s report showed. Purchases fell 0.6 percent at furniture outlets and 1.4 percent at retailers of sporting goods, books and music.
Sales climbed at electronics store, building materials outlets, gasoline stations and grocery chains.
Purchases excluding merchants such as food services, car dealers, hardware stores and service stations -- which are the figures used to calculate gross domestic product -- fell 0.3 percent after a revised 0.3 percent increase in the previous month that was smaller than initially reported.
Today’s report shows spending is cooling after a pickup in the final three months of 2013 as the labor market struggles to improve. Household purchases grew 3.3 percent in the fourth quarter, the biggest gain since the end of 2010, a Commerce Department data showed on Jan. 30. The economy expanded at a 3.2 percent annual rate.
Payrolls increased 113,000 in January after climbing 75,000 a month earlier, the weakest back-to-back gain in three years, Labor Department figures showed Feb. 7.
Americans’ wealth is getting a boost from higher home prices, which climbed in the 12 months ended in November by the most since 2006, according to the latest available S&P/Case- Shiller index of property values. A 30 percent jump in the Standard & Poor’s 500 Index last year also has bolstered consumers’ finances.
Some companies are benefiting from improving demand. Ralph Lauren Corp., the retailer of its namesake brand clothing, posted fiscal third-quarter profit that surpassed analysts’ estimates as demand from North American department stores boosted sales. Revenue in the year through March will increase 7 percent, the high end of its previous forecast, Ralph Lauren said on Feb. 5.
Michael Kors Holdings Ltd., another luxury-goods seller, on Feb. 4 boosted its full-year profit and sales forecasts after reporting a 60 percent jump in holiday-quarter revenue.
At the same time, some businesses aren’t faring as well. McDonald’s Corp., the world’s largest restaurant chain, said sales at its established U.S. stores fell for the third straight month in January as severe weather and waning consumer confidence kept diners at home. The Oak Brook, Illinois-based company, which has recently struggled to attract Americans amid fierce restaurant competition, cited “broad-based challenges including severe winter weather” in the U.S., according to its Feb. 10 statement.