NEW YORK - Americans bought a sweater or two, ate out a little more, purchased some gadgets and turned to the Internet in search of bargains in January. Such small indulgences provided some relief to suffering stores, boosting retail sales by 1 percent.
Small indulgences sent retail sales up 1 percent
Economists expected a 0.8 percent decrease. They don't expect the good news to continue.
February 13, 2009 at 2:09AM
The unexpected increase from December, reported by the Commerce Department on Thursday, reversed a six-month decline and marked the biggest increase in 14 months.
But with nearly 5 million Americans still drawing unemployment benefits late last month and the specter of more layoffs to come, economists believe the reversal is unlikely to last. In a sign of how fearful businesses are, they slashed inventories in December by the biggest amount in seven years -- potentially triggering further cutbacks in production and more layoffs.
Clearly, however, any lift in spending is worth watching.
"Consumers began to treat themselves a little better," said Joel Naroff, president and chief economist at Naroff Economic Advisors Inc.
Whether this is a sign of a thaw in consumer spending or a blip, he said he won't know for another few months. But he said consumers, shocked since the financial meltdown in September, may be moving from "doing nothing to doing a little something."
The January figures were better than the 0.8 percent decline that economists surveyed by Thomson First Call expected. Retail sales plunged a revised 3 percent in December.
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“No one knows why a Grinch hates the whole Christmas season,” one verse went. “Now please don’t ask why, no one quite knows the reason.”
