Retail sales rose 0.5 percent in January, with most of the increase coming from a surge in auto sales, the Commerce Department said yesterday.
Retail stores sold $128.1 billion in goods in January, up $600 million from December. It was the third consecutive increase and the highest monthly total since August, when sales were $128.9 billion.
The Commerce Department also revised earlier estimates for December and November, showing better sales than previously expected. Sales were up a strong 1.2 percent in December and a modest 0.3 percent in November, compared with previous estimates of 0.7 percent and 0.1 percent, respectively.
Because consumer spending accounts for two-thirds of overall economic activity, analysts have been watching consumer spending closely for signs of an economic slowdown.
The report "shows a solid pace of spending through Christmas and beyond," said Allen Sinai, chief economist of The Boston Co. "Consumer sentiment has rebounded now ... and is just below precrash levels.
Some analysts, however, cautioned against reading the report too optimistically.
"The big increase in January ... should be taken with a grain of salt," said Richard W. Rahn, chief economist of the U.S. Chamber of Commerce. "Whatever strength we've seen has been mostly in automobile sales."
Car sales rose 1.6 percent in January after an increase of 1.9 percent in December. Excluding autos, sales rose 0.2 percent last month after a gain of 0.9 percent in December. Auto sales had slumped in the fall after dealers discontinued special sales incentives.
For January, sales of durable goods -- items expected to last three or more years -- increased 1.3 percent after a 1.9 percent gain in December. Sales of nondurable goods were unchanged in January after a 0.7 percent gain in December.
Other sales details included:
Furniture and home furnishings, up 2.6 percent after a dip of 0.5 percent in December. Hardware and building supply stores, up 2.9 percent after a month of no change. Department and other general merchandise, up 2.5 percent after a 1.4 percent rise a month earlier. Drug stores, up 1.7 percent, and gasoline stations, up 1.6 percent. Grocery and other food stores, down 0.8 percent; restaurants and bars, down 0.9 percent; and clothing stores, down 0.5 percent.