Sales

Toys “R” Us to start liquidation sales; economist says closings don’t represent entire industry

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CLEVELAND, Ohio – This week, while Toys “R” Us is expected to start liquidation sales and Claire’s announces filing for Chapter 11 bankruptcy protection, Cleveland-based chief economist for the National Retail Federation says the overall retail landscape continues to shift but is looking healthier than last year.

Jack Kleinhenz, Ph.D and chief economist for the world’s largest retail trade association, said while the rash of reported national retail store closings and job losses are real, he wouldn’t say they are a direct indication that the retail industry is moving backward.

“I think there is misinformation or a misunderstanding about the health of the retail industry,” said Kleinhenz, who is also principal and chief economist of Kleinhenz and Associates, a Cleveland-based registered investment advisory firm that specializes in financial consulting and wealth management services.

“We recognize these store closings are happening, but overall we’ve got to be careful to not focus just on store closings because other areas are performing,” he said, noting that in February, according to the Bureau of Labor Statistics, 50,000 jobs were added in retail nationwide including auto sales and gas sales. “If we take out those two categories then, still 46,000 retail jobs were added in the month of February.”

However, according to U.S. Labor Department data, job loss can’t be ignored. Between 2001 and 2016, jobs at traditional department stores fell 46 percent. For perspective, that’s a bigger drop than other troubled industries such as coal mining (32 percent drop) and factory employment (25 percent drop) during the same time span.

MarketWatch reported that in 2017, department stores alone lost 29,900 jobs, while general merchandising stores cut 15,700 workers. In addition, last year’s BLS data also showed retail discharges and layoffs grew to a total of 212,000 nationwide – the highest level in nearly two years.

Kleinhenz said based on all of the area data he’s analyzed and the NRF’s forecast, they still believe 2018 will be a stronger year for retail.

Some department stores are moving toward cost fulfillment centers, while other e-commerce retailers, discount stores, luxury goods, and even some small businesses with specialized niches are growing.

In Northeast Ohio for instance, Amazon is building a fulfillment center in Euclid in what once was a retail strip that included a shuttered Toys “R” Us. The dead mall will be replaced by an Amazon fulfillment center, scheduled to open in 2019.

A similar, but larger, project is under construction and set to open next year in North Randall, where Randall Park Mall once stood. Between the two Amazon facilities, the company will employ more than 3,000 people.

“The landscape is changing and the way the industry is operating is changing. They’re looking to be more cost efficient. Ultimately retailers want to deliver good price and value, which is no different than any other industry,” he said.

“Undoubtedly they’re facing significant competition and consequently they need to change the way they’re operating given the environment.”

RETAIL CLOSINGS

The national retail landscape is changing rapidly with a great deal of upheaval as brick-and-mortar stores continue to struggle to change and adapt in the highly competitive digital age.

Claire’s Chapter 11 bankruptcy filing on Monday, is the latest in a string of mall-based stores shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.

But mall-based stores aren’t the only casualties of consumers increasingly more comfortable ordering products online. Toys “R” Us, another company left deep in debt from a leveraged buyout, said last week that it was liquidating its 735 stores in the United States. The bankrupt retailer is closing one-fifth of its U.S. outlets, which could end up being more than 180 stores including locations in Mentor, Western Hills, Dayton and Dublin, Ohio. Liquidation sales were to begin Thursday, but were delayed this morning until possibly Friday or later.

In 2017, nearly 9,000 stores closed across retail sectors. Cushman & Wakefield said that number will be between 10,000 and 11,000 doors this year–and that’s fewer than the 13,000 the analysts initially forecast, thanks in part to Simon Properties’ legal action attempting to block Starbucks from closing Teavana locations.

“Not everyone is shrinking! Off-price apparel, discounters, warehouse club stores and dollar stores will continue to post record growth,” Garrick Brown, vice president of Retail Intelligence for the Americas, said in a January blog.

“Grocery stores and most restaurants will continue to account for growth, even as the weakest concepts will increasingly struggle with a saturated marketplace,” he said.

Still, last year was a record year for both store closings and retail bankruptcies. Dozens of retailers including Macy’s, Sears, and J.C. Penney shuttered thousands of stores — far exceeding recessionary levels — and 50 chains filed for bankruptcy.

The commercial real estate firm CoStar has estimated that nearly a quarter of malls in the U.S., or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor tenant. Chains that have confirmed they will be closing locations in 2018 include Bon-Ton, Gap, Sears-Kmart and Walgreens.

In January, Walmart announced plans to close 63 Sam’s Club stores across the U.S. including one in Cincinnati.

Teen retailer Abercrombie & Fitch is bouncing back by cutting its stores. The New Albany, Ohio-based company was praised by analysts easier this month after it announced positive same-store sales growth in its fourth-quarter results. Same-store sales were up 9 percent overall at the company, boosted by 11 percent growth at Hollister and 5 percent at the Abercrombie brand itself.

But at the same time, the company also announced it would be closing up to 60 Abercrombie and Hollister stores in 2018. Closing store locations have not been identified yet.

By Marcia Pledger, The Plain Dealer

cleveland.com

Retailers are hiring more people. One reason: Home renovations.

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The nation’s unemployment rate remained unchanged in February, but there was one bright spot many economists weren’t expecting: an influx of retail jobs.

In all, retailers added 50,300 jobs in February — four times the number from the month before — even as the U.S. unemployment rate stayed steady at 4.1 percent.

One reason for the gains, economists said: Americans are increasingly renovating their homes instead of buying new ones, helping create thousands of retail jobs at companies like Home Depot and Lowe’s.

Building-material stores hired more than 10,000 workers in February to keep up with booming demand, according to data from the Bureau of Labor Statistics. Those positions accounted for more than one-fifth of the total retail jobs added last month.

The gains are part of a larger trend. Building-material and garden supply stores have added roughly 49,000 jobs in the past year.

“This is a housing repair and remodeling story — and not just because of the recent hurricanes and fires,” said Diane Swonk, chief economist at professional-services firm Grant Thornton. “In many cases, people are realizing it’s cheaper and easier to add on to their homes than to buy new ones.”

Low housing supply and high costs, particularly in larger cities, are prompting prospective buyers to think twice before buying a house, Swonk said. Other factors, such as rising interest rates and changes to mortgage-related tax credits, are also contributing to their decisions.

“Add to that the housing stock is older and more decrepit than it used to be, and you’re seeing a boom in remodeling,” Swonk said, adding that she is in the process of replacing the roof on her Chicago-area home.

Homeowners are projected to spend $340 billion on home improvements and repairs this year, up 8 percent from last year, marking the highest increase since before the Great Recession, according to Harvard University’s Joint Center for Housing Studies.

Increased demand is also helping create new jobs, albeit low-wage positions that are often seasonal. Home Depot announced plans to hire 80,000 workers last month, while Lowe’s said it would hire more than 53,000 seasonal employees to prepare for spring.

“What’s striking about these numbers is that they are unaffected by online retail,” said Jed Kolko, chief economist at the online jobs site Indeed. “Most people aren’t buying their lumber or potting soil online.”

But wages remain low: The median pay for retail workers is about $11.01 per hour, or $22,900 a year, according to BLS data.

The jump in employment is a departure from recent months: The retail sector lost 25,900 jobs in December but added 14,800 in January. (Warehouse jobs, which are not counted in the retail figures, grew by about 400 positions in February.)

“I did not expect a large increase in February, in all honesty,” said Jack Kleinhenz, chief economist for the National Retail Federation, a trade group that lobbies on behalf of the industry. “This was a substantial increase at the industry level.”

General-merchandise stores such as Walmart, Target and Costco added 17,700 jobs, while clothing and accessories stores hired 14,900. A number of those newly created positions, economists said, were probably focused on retailers’ growing online and mobile businesses.

Walmart, for example, has hired more than 18,000 personal shoppers in recent years as it builds up its shop-online, pick-up-in-store service, executives said on a Tuesday call with reporters.

“Companies are putting more people on the floor,” Swonk said. “We don’t have a handle on whether they’re hiring for online operations vs. in-store, but we know they’re hiring.”

By Abha Bhattarai

The Washington Post

5 Things Consumers Are Buying More of Despite Slowing Retail Sales

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Consumer spending, which accounts for two-thirds of U.S. economic activities, slowed down in the first two months of 2018 after a booming quarter at the end of 2017. The U.S. retail sales in February missed economists’ forecasts by 0.5 percent and came out 0.1 percent lower than January, according to the monthly retail sales report released by the Commerce Department on Wednesday.

It is also the first time since April 2012 that retail sales have declined for the third straight month.

The decline in February was mainly triggered by slowing sales in automobiles (down 0.9 percent), gas (down 1.2 percent) and department stores (down 0.9 percent).

However, there are five categories where spending grew against the trend. Spending in building material and home improvement supplies was up by 1.9 percent; sporting goods, books and music products were up by 2.2 percent; online retailers overall saw 1.0 percent growth; clothing and accessories were up by 0.4 percent; and restaurants and bars were up by 0.2 percent.

While spending growth in some of these categories may be simply due to seasonal factors, such as sporting goods and restaurant spending, others signal bigger changes in consumer spending trends.

“Month-to-month trends are really hard to interpret, because seasonal factors can cause biases. It’s the year-over-year numbers that are more important,” said Jack Kleinhenz, chief economist at the National Retail Federation.

“What’s going on in furniture and home building material, as well as electronics and appliances, is reflecting the activities in the housing market,” Kleinhenz told Observer. “People are in the process of renovating their homes. Sales of newly built homes and existing homes have both increased in the last year, and they need to be outfitted with new furnishing and new appliances. So those categories are often correlated.”

Sales for existing homes grew by 2.6 percent in 2017 from 2016, according to the National Association of Realtors, continuing an upward trend since 2009. New home sales also increased by nine percent in 2017 from 2016, according to Census data.

Stimulus in home-related spending has also fueled sales at major home improvement chains like Home Depot and Lowes, both of which saw growth in same-store sales over the latest quarter.

By  • 

The Observer

Americans Spend More Than Expected as Holiday Season Heats Up

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Shoppers

 

Americans are spending more than expected this holiday season, fueled by income gains, confidence in the economic outlook, buoyant financial markets and modest inflation.

The boost includes in-store and online spending at brick-and-mortar retailers such as Wal-Mart Stores Inc. and Nordstrom Inc., which clocked the largest year-over-year November sales increase in seven years. Home-furnishing stores and electronics-and-appliance stores also logged strong spending numbers, despite competition from online-shopping websites, which also posted robust gains.

“It’s an impressive start to the holiday season and probably the best in the last few years,” said Jack Kleinhenz, chief economist at the National Retail Federation, a group that represents retail stores. “When you put the pieces together, job and wage gains, modest inflation, healthy balance sheet and elevated consumer confidence…there’s an improved willingness to spend.”

Altogether, sales at online retailers, brick-and-mortar stores and restaurants rose 0.8% in November from the prior month, well above the 0.3% increase economists surveyed by The Wall Street Journal had expected. That was up 5.8% from a year earlier, the largest yearly November increase since 2011. Despite their woes from online competition, general merchandisers such as department stores fared well, registering a 3.6% sales increase from a year earlier, the best November performance since 2010.

“Overall these data are much stronger than expected,” said Ian Shepherdson, an economist at Pantheon Macroeconomics, in a note to clients. “People have the inclination and the wherewithal to continue spending at a robust pace.”

Taken altogether, the data suggest the U.S. is on track for robust growth in the fourth quarter. Macroeconomic Advisers, a forecasting firm, estimated the economy is growing at a 2.8% annual pace in the October-to-December period, up from a 2.6% forecast before the retail-data release. The Federal Reserve Bank of Atlanta estimated a 3.3% growth rate.

One caveat: Spending is so strong it is outpacing income gains, meaning Americans are saving at a slower rate, which could lead to a spending slowdown later or the threat of rising debt levels.

Spending comparisons to last year were boosted by a weak holiday season in 2016 for retailers, which were plagued by high inventories and a slowdown in purchases by international tourists amid a rising dollar.

This year, some brick-and-mortar stores appear to be better managing their inventory. In their most recent quarter, both Macy’s Inc. and Kohl’s Corp. said their stores had less excess merchandise to clear out at steeply reduced prices. “We don’t have the albatross of a lot of extra inventory like we did last year,” Macy’s Chief Executive Jeff Gennette said in an interview on Black Friday. That, in turn, resulted in less discounting, Mr. Gennette said.

Mr. Kleinhenz said increasingly sophisticated website and app advertising is helping brick-and-mortar retailers too. “It’s a combined strategy that retailers have developed that integrates the use of the internet with the brick-and-mortar shopping approach,” he said.

The retail industry is undergoing another major shift — to e-commerce. How did we get here? Photo: Associated Press Related Video

Since Nov. 1, online revenue has risen 24% compared with the same period last year, said Slice Intelligence, a research firm that tracks online purchase receipts. Online sales at Target Corp., Kohl’s Corp. and Costco Wholesale Corp. rose the fastest, the firm said, though Amazon continued to grow rapidly from a larger sales base.

Better-than-expected quarterly results were reported by some mall stalwarts that have been battered, including Macy’s Inc. and Gap Inc. “There is a consolidation taking place” in the apparel market, Gap CEO Art Peck told analysts on Nov. 16. “Almost regardless of consumer sentiment, we’ve got an opportunity to drive growth and gain market share,” Mr. Peck said, as the company closes stores, remodels others and speeds up its product pipeline.

The closure of thousands of stores this year could be giving those left standing a boost.

“On an overall basis, a portion of our improvement in our sales trend is attributable to our targeted efforts to capture share from competitive store closures in some of our trade areas, and we expect this will continue, if not accelerate, through the holiday season,” Kohl’s CEO Kevin Mansell told analysts in November.

Some businesses, meanwhile, are feeling a boost from the stronger labor market. Pete Benck, owner of Madison, Wis.-based vintage clothing store Good Style Shop, said this holiday season’s business has been stronger than last year’s.

“We have had a lot of foot traffic, and I think there’s a lot of confidence in our consumers lately,” Mr. Benck said.

The National Retail Federation expects consumers nationwide to spend about 4% more during the holiday shopping season than they had in 2016. That would make 2017 the strongest holiday season since 2014. Mr. Kleinhenz said the U.S. appears to be on track to meet that goal.

Sarah Nassauer Wall Street Journal

Yahoo Finance!

Write to Sharon Nunn at sharon.nunn@wsj.com

Photo credit:Black Friday shoppers sort through their purchases while waiting for their rides at The Mall at Turtle Creek in Jonesboro, Ark. Americans, by most measures, appear ready to shop this holiday season. (Staci Vandagriff/The Jonesboro Sun via AP, File)

Strong June rebound signals job growth is solid again — but substantial raises remain elusive

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With a strong rebound in job growth last month, the labor market is back on solid ground. But workers are still struggling to get the substantial wage gains they’ve been craving since the end of the recession, economists said.

Here are the highlights:

  • The economy added 222,000 net new jobs, the Labor Department said — the best performance since February and well above analyst expectations.
  • The unemployment rate ticked up to 4.4% from May’s 16-year low, but because more people joined the labor force.
  • May’s job growth was revised up to 152,000 and April also was revised up, as part of a gain of 47,000 more total jobs for those two months than initially estimated.
  • Wages continued their steady but slow recent growth, increasing 4 cents to $26.25.

“Hiring is back to where it has been throughout much of the 8-year-old economic expansion,” said Mark Hamrick, senior economic analyst at financial information website Bankrate.com.

“Growth is modest, not spectacular, which is to be expected for a mature expansion.”

Job growth returns to 2016 pace

With June’s strong growth and the statistical revisions, monthly job gains have averaged 180,000 this year, close to last year’s level of 187,000.

On Monday, President Trump criticized the media for ignoring the “great jobs numbers” since he took office. The White House offered a muted response Friday, with Press Secretary Sean Spicer touting the job gains on Twitter as “great news” for U.S. workers.

Economists said the pace of job growth this year has not been great, but has been solid. And the bounce back in June allays any fears of a significant slowdown.

“This was a good jobs report. It suggests there’s still a fair amount of vitality in the U.S. labor market,” said Nariman Behravesh, chief economist at IHS Markit, a business research and analysis firm.

But the report probably overstated the strength of the market somewhat because it was boosted by a gain of 35,000 net new jobs in state and local government after the sector shed 8,000 positions in May, he said.

The June gains likely represent a temporary jump as school districts made new hires for the fall, Behravesh said. He expected job growth in coming months to be in the range of 150,000 to 180,000.

Retail gains jobs for first time since January

Customers shop at an Aldi grocery store in Chicago on June 12.
Customers shop at an Aldi grocery store in Chicago on June 12. (Scott Olson / Getty Images)

June’s job growth was boosted by large increases in hiring in the healthcare and social-assistance sector, as well as by local governments.

But the most notable move was by retailers. The sector added 8,100 net new jobs in June after shedding 7,200 the previous month.

From February through May, retail payrolls declined by 79,400 jobs as the sector struggled with the growing shift to online shopping.

“The gain in June shows that the industry is still very much meeting the demands of consumers and households,” said Jack Kleinhenz, chief economist for the National Retail Federation.

He cautioned that “one month does not make a trend,” a point echoed by other economists.

“We won’t see sustained employment growth in the retail sector,” said Cathy Barrera, chief economic advisor at ZipRecruiter, the Santa Monica job-hunting site.

“Between the competition with online options for consumers and for new technologies that are replacing workers in stores — self checkout is one example of that — I don’t think those jobs are going to be there in the long run,” she said.

A higher jobless rate is actually good

(@latimesgraphics)

The unemployment rate rose 0.1 percentage point last month after hitting its lowest level since 2001 in May. But the increase, to 4.4%, was for a good reason — 361,000 people joined the labor force a month after it contracted.

That nudged up the percentage of working-age Americans either working or actively looking for a job to 62.8%. That labor force participation rate still is near a four-decade low, and economists said the increasing retirement of baby boomers makes it difficult to boost the level significantly.

The participation rates for men and women ages 25 to 54 have almost gotten back to their pre-recession levels, Barrera said. But for Americans ages 16 to 24, the recovery has been slower.

“It makes sense that this is the last group to recover,” she said. “There just weren’t a lot of jobs available for young people high school-age or college-age during the recession.”

Some of them have opted to stay in school longer to boost their job qualifications, Barrera said. Getting those Americans back in the workforce will help tighten the labor market and lead to increased wages.

Wage growth is still struggling

Average hourly earnings increased 4 cents last month to $26.25, a slight improvement over May’s gains.

For the 12 months ended June 30, wages have increased 2.5%. That’s a slight increase over the 12-month period ended May 31 and above the low rate of inflation. But it’s still short of the stronger growth economists have been hoping for as the labor market tightens.

“If wages accelerate, that will encourage more people who might have given up looking for work to start looking again,” said Jed Kolko, chief economist with employment website Indeed.com. “That’s why wages are an important and the most troubling piece of the puzzle right now.”

With unemployment low, employers should be forced to increase wages to lure new workers and keep existing ones.

But some of the biggest job gains in June were in lower-wage sectors, like healthcare and temporary workers, which kept wage growth down, Kolko said

“It’s unclear how much the slower wage growth is due to long-term factors, like productivity slowdown and demographic shifts, and how much of it could be reversed by a tighter labor market and employers bidding up wages,” he said.

Federal Reserve monetary policymakers have been expecting faster wage growth as the unemployment rate falls.

Still, the job-creation figures for June should provide relief to central bank officials, who have been increasing a key short-term interest rate in large part because of the strength of the labor market.

In June, the Fed nudged the rate up for the third time in six months. Even though the pace of job growth has moderated this year, Fed Chairwoman Janet L. Yellen said the labor market “continues to strengthen.”

If job growth remains solid, the Fed is expected to raise the rate again before the end of the year.

By Jim Puzzanghera 

Contact Reporter

L.A. Times

July 7, 2017

 

RETAIL SALES GREW 0.3 PERCENT IN MARCH

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WASHINGTON – Retail sales in March increased 0.3 percent seasonally adjusted over February and 3.5 percent unadjusted year-over-year, according to calculations released today by the National Retail Federation. The numbers exclude automobiles, gasoline stations and restaurants.

“Various factors were at play in the first quarter, but we are again seeing a pattern similar to previous years — consumer spending was weak but is expected to pick up as we move through the year,” NRF Chief Economist Jack Kleinhenz said.

“A lack of pricing power continues to plague the retail industry,” Kleinhenz said, noting that Consumer Price Index numbers released today showed prices reversing course in March. “There is no doubt that weak pricing power led to the bumpy period for retailers in the first part of this year.”

On a three-month moving average, retail sales have grown 2.8 percent year-over-year. When looking at business lines, performance in March was again uneven as clothing and accessories and general merchandise saw slight gains while there were declines in building materials and supplies and sporting goods, likely due to winter weather. Nonetheless, the sectors with declines showed increases year-over-year.

A few specifics include:

  • Online and other non-store sales increased 0.6 percent over February and increased 11.4 percent unadjusted year-over-year.
  • Sales at clothing and accessories stores increased 1 percent seasonally adjusted from February but decreased 2.5 percent unadjusted year-over-year.
  • Sales at general merchandise stores increased 0.3 percent seasonally adjusted over February and remained even year-over-year.
  • Electronics and appliances stores’ sales increased 2.6 percent seasonally adjusted over February but decreased 0.4 percent unadjusted year-over-year.
  • Furniture and home furnishings stores’ sales decreased 0.3 percent from February but increased 3.3 percent unadjusted year-over-year.
  • Sales at building materials and supplies stores decreased 1.5 percent seasonally adjusted from February but increased 6.3 percent unadjusted year-over-year.
  • Sporting goods stores’ sales decreased 0.8 percent seasonally adjusted from February and decreased 4.7 percent unadjusted year-over-year.
  • Sales at health and personal care stores increased 0.1 percent seasonally adjusted over February and increased 5.3 percent unadjusted year-over-year.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.

April 14, 2017

RETAIL SALES GREW 0.2 PERCENT IN FEBRUARY

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February retail sales grew 0.2 percent seasonally adjusted over January and 0.8 percent unadjusted year-over-year, according to calculations released today by the National Retail Federation. The numbers exclude automobiles, gasoline stations and restaurants.

“Sales growth held up well, given warmer than normal weather and tax refund delays,” NRF Chief Economist Jack Kleinhenz said.

“While consumers benefit by purchasing more for less, the top-line retail numbers reflect a lack of pricing power and, in many cases, hide underlying consumer demand.”

“While consumer spending in the first quarter has been erratic and most often weak, it registers positive improvement as the year continues,” Kleinhenz said.

On a three-month moving average year-over-year, retail sales have grown 2.8 percent. When looking at business lines, performance in February was very mixed as electronics and appliance stores saw declines while building materials and garden supplies saw solid growth.

A few specifics from the report include:

  • Online and other non-store sales increased 1.2 percent over the previous month and increased 8.2 percent unadjusted year-over-year.
  • Sales at clothing and accessories stores decreased 0.5 percent seasonally adjusted from the previous month and decreased 1.1 percent unadjusted year-over-year.
  • Sales at general merchandise stores decreased 0.2 percent seasonally adjusted over the previous month and decreased 1.4 percent year-over-year.
  • Electronics and appliances stores’ sales decreased 2.8 percent seasonally adjusted over the previous month and decreased 9.8 percent unadjusted year-over-year.
  • Furniture and home furnishings stores’ sales increased 0.7 percent over the previous month and increased 1.4 percent unadjusted year-over-year.
  • Sales at building materials and supplies stores increased 1.8 percent seasonally adjusted over the previous month and increased 3.7 percent unadjusted year-over-year.
  • Sporting goods stores’ sales decreased 0.4 percent seasonally adjusted over the previous month and decreased 6.7 percent unadjusted year-over-year.
  • Sales at health and personal care stores increased 0.7 percent seasonally adjusted over the previous month and increased 2.7 percent unadjusted year-over-year.
    Treacy Reynolds
    March 15, 2017

FOLLOWING JOB GAINS IN JANUARY, RETAILERS SCALE BACK IN FEBRUARY

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Retail industry employment decreased by 31,300 jobs in February from January, offsetting gains made the previous month, the National Retail Federation said today. The retail numbers exclude automobile dealers, gasoline stations and restaurants. Despite the correction in retail, the overall economy gained 235,000 jobs in February, the Labor Department said.

“Mild weather contributed to retailers scaling back employment in February, reversing the gains the industry made in January,” NRF Chief Economist Jack Kleinhenz said. “However, the surge in consumer and business optimism may have propelled the economy-wide increase in jobs last month and supports our prediction for stronger consumer spending and retail sales for 2017.”

Average hourly earnings were up 2.8 percent year-over-year, compared with 2.5 percent in January.

The Labor Department said February unemployment fell to 4.7 percent, down from 4.8 percent in January.

Robin Roberts
March 10, 2017

RETAIL SALES UP 0.4 PERCENT IN JANUARY

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January retail sales grew a solid 3.8 percent unadjusted year-over-year and 0.4 percent seasonally adjusted from an already-strong December, according to calculations released today by the National Retail Federation. The numbers exclude automobiles, gasoline stations and restaurants.

“The healthy monthly gain was driven by January’s strong payroll gains, retail employment gains and business sentiment.”
Jack Kleinhenz
NRF Chief Economist

“The retail industry started the year on a high note, continuing the momentum from the 2016 holiday season. The healthy monthly gain was driven by January’s strong payroll gains, retail employment gains and business sentiment,” NRF Chief Economist Jack Kleinhenz said.

“We haven’t seen strong January growth in several years, which indicates that consumers are increasing their spending and remain the leading driver of the economy,” Kleinhenz said.

There were broad-based monthly increases across the majority of sectors, with the exception of non-store, which was flat in January.

A few specifics from the report include:

  • Online and other non-store sales were flat over the previous month and increased 14.5 percent unadjusted year-over-year.
  • Sales at clothing and accessories stores increased 1 percent seasonally adjusted from the previous month and increased 0.4 percent unadjusted year-over-year.
  • Sales at general merchandise stores increased 0.9 percent seasonally adjusted over the previous month and decreased 1.4 percent year-over-year.
  • Electronics and appliances stores’ sales increased 1.6 percent seasonally adjusted over the previous month and decreased 1.7 percent unadjusted year-over-year.
  • Furniture and home furnishings stores’ sales were flat over the previous month and decreased 0.3 percent unadjusted year-over-year.
  • Sales at building materials and supplies stores increased 0.3 percent seasonally adjusted over the previous month and increased 6.6 percent unadjusted year-over-year.
  • Sporting goods stores’ sales increased 1.8 percent seasonally adjusted over the previous month and decreased 3.7 percent unadjusted year-over-year.
  • Sales at health and personal care stores increased 0.7 percent seasonally adjusted over the previous month and increased 9.4 percent unadjusted year-over-year.
    Treacy Reynolds
    February 15, 2017