January retail sales numbers show continued gains, according to Commerce and NRF
February 15, 2011
Retail sales began 2011 on a relatively promising note, according to data released by the United States Department of Commerce and the National Retail Federation (NRF).
January retail sales, which include non-general merchandise like automobiles, gasoline, and restaurants, were $381.6 billion for a 0.3 percent increase from December and a 7.8 percent increase over January 2010, according to Commerce. Total retail sales for the November 2010 through January 2011 period were up 7.6 percent year-over-year, and Commerce revised the November to December 2010 increase from 0.6 percent to 0.5 percent. January represents the seventh straight month of increased retail sales, according to Commerce data, and is the highest month for retail sales since November 2007.
The NRF reported that January retail sales, which exclude automobiles, gas stations, and restaurants, were up 0.2 percent from December on a seasonally-adjusted basis and up 3.5 percent unadjusted year-over-year.
“Many factors, including stock market gains, tax cuts, income growth and savings built up during the recession are contributing to the recent spur in consumer spending,” said NRF Chief Economist Jack Kleinhenz in a statement. “While some of what we saw in January is directly related to seasonal purchases, it’s encouraging to see spending on other discretionary items such as electronics also increased.”
Improving retail sales numbers are also evident in the form in increased freight transportation volumes to a certain extent, especially in the trucking and railroad and intermodal markets.
Industry experts have told LM that with retail sales showing sustained improvement over the last seven months that it is possible freight transportation volumes will be more in sync with retail numbers, when it comes to both sets of data growing.
And even though freight data overall is not at pre-recession levels, these retail numbers provide some optimism that there may be better freight data on the horizon, especially freight with a retail-oriented focus.
FTR Associates Managing Director and Senior Consultant Noel Perry said on a recent Webcast hosted by his firm that the economy is entering a period of consumption, which includes both services and goods, and he added that retail sales are growing at a stronger level than they did during the 2003-2004 economic recovery.
And Charles W. “Chuck” Clowdis, Jr., Managing Director, Transportation Consulting & Advisory Services, at IHS Global Insight, said this recent batch of numbers reflects a positive trend for both retail and trucking, in particular, although he explained more work needs to be done.
“Several economic indicators are finally pointing in the right direction—the release of pent-up consumer demand is showing signs in the January NRF numbers—but we are still cautious as long as unemployment remains so high,” said Clowdis. “From a transport perspective, both LTL and TL carriers are fairing better than they have in the past several years. Rate increases are sticking as shippers realize that capacity will become precious as the recovery accelerates.”
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