The Commerce Department reported that retail sales grew 0.5% in January from December (sales were up 4.7% from January 2009), helped by a surge in general merchandise sales. The gain, following a revised 0.1% decline in December, signals that consumer spending power is improving, which could help sustain the economic recovery. Nevertheless, unemployment remains stubbornly high, credit remains tight and consumers continue to de-leverage, which could impact spending and dampen the recovery in the months ahead. In addition, severe blizzards in Northeast and Mid-Atlantic states may depress February sales, although early spring sales may get a boost as consumers who were snowbound look to get out and shop in March.
The overall sales increase in January was helped by a 1.5% jump in sales at general merchandise stores, a category that includes major department stores and big national chains such as Walmart and Target. Sales also grew at electronics and appliance chains (1.2%), at sporting goods, book and music stores (1%), at grocery stores (0.7%), at gasoline stations (0.4%), at apparel chains (0.3%), and at health and personal care stores (0.1%).