Economy Watch: Retail Sales Inch Up

U.S. retail sales grew at their slowest rate in three months, the Census Bureau reported.

U.S. retail sales grew at their slowest rate in three months, the Census Bureau reported on Wednesday. The expiration of the payroll tax holiday at the beginning of 2013 is widely viewed as putting a bit of a damper on consumer spending during January, since on average American workers are taking home about $40 less every two weeks now. Gas prices are up, too.

Retail sales were up a smallish 0.1 percent in January compared with December (seasonally adjusted, to account for the fact the people spend a lot during December, but not so much in January). In December and November 2012 both, the month-over-month uptick was a healthier 0.5 percent. Year-over-year in January 2013, however, sales were up 4.4 percent.

Car sales were down in January by 0.1 percent. Take autos (and gas) out of the overall retail sales picture, and sales still rose 0.1 percent in January. General merchandise stores (that means you, Walmart) saw a strong increase of 1.1 percent for the month, and sporting goods stores and non-store retailers (that means you, Amazon) did fairly well during the month too.

SoCal sees brisk home sales

In another report on the bellwether residential market in southern California, DataQuick said on Wednesday that SoCal’s housing market started 2013 with the highest January home sales in six years. One driver was sales to investors and cash buyers, who bought near record levels, while move-up activity remained relatively brisk as well.

A total of 16,058 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, the real estate data specialist noted. Last month’s sales were the highest for the month of January since 2007, though they’re 8.8 percent below the January average of 17,609 sales.

Does it amount to a bubble? Probably not. “For the overall market, price pressures should gradually ease as more homeowners react to rising values,” DataQuick president John Walsh noted in a press statement. “This is the ‘supply response’ many analysts expect. The idea is that many who’ve held out for higher prices will be tempted to stick a for-sale sign in the front yard.”

Wall Street had a listless, mixed day on Wednesday. The Dow Jones Industrial Average lost 35.76 points, or 0.26 percent, while the S&P 500 gained a slight 0.06 percent and the Nasdaq was up 0.33 percent.