Consumer spending data have been surprisingly moderate given the unusual strength in consumer confidence, but today's retail sales report, which includes an important revision, now moves spending more in line with confidence. Retail sales rose 0.4 percent in January which tops Econoday's very modest 0.1 percent consensus and the top estimate of 0.3 percent. Importantly December, which is the most important retail month, is now revised a sharp 4 tenths higher to a very strong plus 1.0 percent.
Vehicles were the special strength of the December report, at a revised plus 3.2 percent vs an initial 2.4 percent, and in a give back are really the only weakness in the January report at minus 1.4 percent. Excluding vehicles, retail sales jumped a very sharp 0.8 percent in January which again beats the top forecast. Ex-auto for December is also part of the good news, revised 2 tenths higher to 0.4 percent.
Electronics & appliance stores show a big January gain at 1.6 percent with restaurants at 1.4 percent and department stores up 1.2 percent. Sporting goods, clothing, health & personal care and building materials all show gains.
But gasoline, where prices are up, have been adding to the gains the past two months and excluding which sales in January show a less impressive gain of only 0.2 percent. This reading for December, however, is a much more impressive plus 0.8 percent.
But gasoline only dims the strength of the report for January which, next to February, is the slowest month on the retail calendar. Today's data point to momentum for consumer spending, which is by far the economy's most important sector.