Looking at retail sales coverage
Happy Valentine’s Day. If you’ve done your part to celebrate the day of love, then you’ve purchased something – flowers, chocolates, a dinner out or Kleenex – and helped bump consumer spending. And that’s good for everyone, especially after Wednesday’s lackluster retail sales number.
While reporting a number should be straightforward, the context and presentation behind it vary from organization to organization. So, let’s take a look at how several major organizations decided to present the 0.1% increase in consumer spending in January.
Bloomberg had a fairly positive analysis of the numbers and even included an upbeat quote at the top.
Retail sales in the U.S. rose in January for a third consecutive month, showing household spending is holding up even as an increase in the payroll tax takes a bigger bite from paychecks.
Purchases climbed 0.1 percent, matching the medianforecast of economists surveyed by Bloomberg, according to Commerce Department figures issued today in Washington. The gain was smaller than the 0.5 percent increases in December and November.
Department stores and online merchants were among those showing growing demand as improving job prospects and a strengthening housing market helped companies such as Gap Inc. and Target Corp. Some economists boosted estimates for the start of the year as the figures eased concern consumer purchases would retrench after a fourth-quarter pickup.
“The first quarter is looking better than we were expecting,” said Conrad DeQuadros, a senior economist at RDQ Economics in New York. “Payrolls are still growing and wage growth, while moderate, is still rising. We’re seeing increases in home prices and equity prices. Those are all positives for the household sector.”
The Wall Street Journal had a slightly more negative look at the numbers. Here’s the top of their piece.
U.S. retail sales saw a modest uptick in January in the first reading of consumer spending since payroll tax increases kicked in, cutting most Americans’ paychecks.
Retail and food service sales increased 0.1% in the first month of 2013 to a seasonally adjusted $416.6 billion, the Commerce Department said Wednesday, marking the third straight monthly gain. That figure matched what economists surveyed by Dow Jones Newswires had expected. Retail sales were up 4.4% from January 2012.
Still, the reading indicates consumers may have pared spending to only the necessities in the face of rising taxes and economic uncertainty. Spending increased at grocery stores and gasoline stations but was flat or falling at restaurants, motor vehicle dealers and furniture stores.
The Reuters story was even more pessimistic, pointing out other drains on consumers’ pockets and drags on spending.
Retail sales barely rose in January as tax increases and higher gasoline prices restrained spending, setting up the economy for only modest growth in the first quarter.
The Commerce Department said on Wednesday retail sales edged up 0.1 percent after a 0.5 percent rise in December.
The small increase suggested the expiration of a 2 percent payroll tax cut on January 1 and higher tax rates for wealthier Americans were hurting the economy.
Still, economists said consumer spending was unlikely to buckle given rising home values, moderate job growth and rallying stock market prices. Stocks have surged in recent months partly on stronger than expected corporate earnings.
The Associated Press story said consumer spending could be a drag on first quarter, indicating a weaker economy.
Americans barely spent more last month at retail businesses and restaurants after higher taxes cut their paychecks. The small increase suggests consumer spending may be weak in the January-March quarter, which could hold back economic growth.
Retail sales ticked up 0.1 percent in January from December, the Commerce Department said Wednesday. That follows a 0.5 percent increase in December and is the smallest in three months.
Sales fell at auto dealerships, clothing stores and furniture stores. They rose at home-improvement stores, gas stations and online retailers.
So-called core retail sales, which exclude autos, building materials, and gas stations, ticked up 0.2 percent. Economists pay close attention to core sales because they strip out the most volatile categories.
The retail sales report is the government’s first look at consumer spending, which drives 70 percent of economic activity.
With the majority of the U.S. economy hanging in the balance, it’s easy to see why everyone watches the numbers so carefully. So, go out and do your part – buy something.