Retail Sales Drop in January

Census Bureau says retail sales are down month-over-month, but up year-over-year. In addition, the MBA reports a 35 percent increase in January single-family sales from December.

The Census Bureau reported on Thursday that U.S. retail sales, adjusted for seasonal variation and holidays but not for price changes, dropped 0.4 percent in January compared with December. Compared with January 2013, however, sales experienced a 2.6 percent increase, and for the three months ending in January 2014, retail sales were up 3.4 percent.

Auto and auto parts sales took a month-over-month dip in January, dropping 2.1 percent. In fact, when auto sales are taken out, the month-over-month change in overall retail sales was exactly 0 – no change. On an annual basis, by contrast, auto sales did very well in January, rising 4.1 percent compared with the same month a year ago.

Other retail categories that did well in January compared with December included gasoline sales, up 1.1 percent (mainly because of price increases), building supply stores (up 1.4 percent), and grocery stores (up 1.1 percent). Losers for the month besides cars included department stores (down 1.5 percent), clothing stores (down 0.9 percent), and – unusually – online sales, which were down 0.6 percent.

On an annual basis, most retail categories did better. Online sales were up 6.5 percent year-over-year in January, grocery stores saw a 4 percent increase, and gas sales were up 1 percent. The bedraggled department store business, however, experienced a 5.7 percent year-over-year drop in sales in January.

MBA Predicts Rise in New Home Sales

The Mortgage Bankers Association estimates that sales of new single-family U.S. homes will be at an annualized of 543,000 units in January 2014, based on data from MBA’s Builder Applications Survey, which was released on Thursday. That’s a 35 percent increase compared with December.

The MBA survey tracks application volume from mortgage subsidiaries of home builders across the country, crunches those numbers as well as other data, and comes up with an early estimate of new home sales volume. The official Census Bureau numbers for January, which won’t be released until Feb. 26, are based on new home sales are recorded at contract signing, which is typically coincident with the mortgage application.

“While the big jump may appear to conflict with other data, such as MBA’s purchase application index and NAR’s existing home sales data that point to a weak market for existing homes, our Builder Application Survey estimate is consistent with reports of homebuilder sentiment that show strength in the market for new homes,” Mike Fratantoni, MBA’s chief economist noted in a statement. “It is also worth noting that the significant January increase also followed a particularly slow pace of sales in November and December.”

Initial Unemployment Claims Edge Up

The Department of Labor said on Thursday that for the week ending Feb. 8, initial unemployment claims were at an annualized rate of 339,000, an increase of 8,000 from the previous week. The less jumpy four-week moving average was 336,750, an increase of 3,500 from the previous week.

Wall Street had a positive day on Thursday, with the Dow Jones Industrial Average gaining 63.65 points, or 0.4 percent. The S&P 500 advanced 0.58 percent and the Nasdaq was up 0.94 percent.