Retail sales fell a moderate 0.9 percent last month, the Commerce Department said yesterday, with a sharp drop in auto sales largely responsible for the decline.
Some economists said the better-than-expected figures pointed to an end of the consumer's unwillingness to spend. But others pointed to a sharply lower revision of the December figures as evidence that the end is not in sight.
December's figure was revised to a 1.5 percent decline in sales. It originally was estimated as a 0.4 percent decline but was adjusted downward largely on the basis of lower auto sales.
Falling demand for new cars and cheaper gasoline were the major culprits behind the slumping sales in both January and December, the department reported.
The U.S. Chamber of Commerce said the steeper-than-anticipated drop in December indicated the economy was weakening even faster than was thought at year's end.
"The sharp downward revision in December retail sales, along with the decline in January, show the consumer is not ready yet to lead the economy out of recession," the business lobby group said.
January's decline was less extreme than analysts feared, with the country in recession and at war. Retail sales had been expected to tumble 1.7 percent as shoppers worried about their jobs and the fighting in the Middle East trimmed spending.
The Commerce Department said auto dealer sales fell 4.4 percent in both January and December. Automakers have been slashing assembly rates since late last year in the face of falling sales. The other significant factor in January was cheaper gasoline. Dealer sales fell 2.3 percent after a 1.7 percent December decline.
But excluding cars, sales in January were unchanged after falling 0.7 percent in December. Some categories of sales -- department stores, food stores and restaurants -- rose last month.
"This report shows sales were a good deal stronger than was expected on discretionary items," said Russ Sheldon, senior economist with Mellon Bank in Pittsburgh. "It suggests a short, mild recession in contrast to the January jobs report."
Analysts noted, however, that the January data also could be revised downward