Despite disappointing automobile sales, consumer spending between December and the end of January increased by 0.9 percent. Overall sales for the year, from January 2011 through January 2012 grew by 4 percent. Core sales, which exclude gasoline, automobiles and building materials, reported gains in January after a flat month in December.
The National Retail Federation (NRF) credits unseasonably warm weather, strong holiday shopping and gift card redemption for the growth. Matthew Shay, president and CEO of the NRF, said that strong spending in January is a positive sign for the industry because it’s typically a slower sales month following the holiday season.
“The consumer is spending and there is certainly no sign of a recessionary downturn, but spending patterns reflect a deleveraging consumer weighted by weak growth and a higher cost of living,” said Steve Blitz, chief economist at ITG Investment Research.
General merchandise stores experienced some of the highest growth rates as they processed sales through credit card terminals. In January, sales increased by 2 percent since December and showed 4.7 percent in year-over-year growth. Retail merchants can invest in online credit card processing services to accommodate online shoppers and maximize sales in the coming year.Back To Blog