Retail sales increased by 0.5% for January, a result in line with consensus expectations.
Consumers have returned to a positive spending trend after December’s marginal loss. The year-over-year trend has recently turned positive, after significant declines which began late 2008.
The strong emphasis on inventory controls over the last year contributed to January’s increase, giving retailer’s the ability to avoid the need to offer aggressive price reductions to move stock.
We’d like to see meaningful improvement in the employment environment and improving consumer sentiment to be more confident that the rebound in consumer spending has legs.
Although the unemployment rate declined recently, we remain concerned that the pace of job growth is going to be too slow to really ignite a robust surge in consumer spending habits.