Post-holiday discounts and offers led the US retail sales to record unexpected increase of nearly 1% in January 2009.
According to the statement given by the Commerce Department, the US retail sales recorded an unexpected 1% increase in January 2009, as reported by BBC.
Retail sales upsurge in January 2009 followed a revised 3% decline in December 2008 and was the first monthly increase since June 2008. Earlier, January was predicted to witness 0.8% decline in retail sales. Sales (excluding car and auto parts) surged by 0.9% during the aforesaid month. Moreover, due to the continuous decline in prices, petrol sales rose 2.6%.
Further, the growth from December 2008 to January 2009 was reported to be the highest since November 2007. The increase in purchases indicated higher spending on food and clothing. However, retail sales in January 2009 fell 9.7% as compared to January 2008.
The driving factor of the US retail sales was the post-holiday discounts offered by majority of retailers across the country. Taking full advantage of the holiday season, retailers lured consumers by offering discounts and various other offers. This, in turn, boosted retail sales in the US. This rebound in retail sales is especially significant as it has followed the extremely weak sales observed in the preceding month.
However, it would be too early to say that the US consumers have once again started spending lavishly. Consumers are likely to resume cutbacks on account of a record deterioration of the household wealth with decline in stocks and home values. The concerns over the stimulus package announced by President Barack Obama would not be sufficient to bring the US economy back on track led the stocks to tumble.
In addition, worsening situation in the job market paves the way for the gloomy retail sales in the coming months. The median estimate in a monthly survey conducted by Bloomberg revealed that rate of unemployment in the US is expected to reach 8.8% during the last three months of 2009 against 7.6% in January 2009.
According to a Research Analyst at RNCOS, “Although the US retailers saw an unexpected bounce-back in sales in January 2009, this recovery is short-lived as recession-affected companies are rigorously cutting down jobs. Increasing job-cuts and declining household wealth are forcing consumers to spend.”
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