Consumer Spending Going Strong

Shoppers in New York City, on Fifth Avenue near Rockefeller Center. Consumer spending is continuing a positive trend according to recent reports (Amal Chen/The Epoch Times)

NEW YORK—U.S. retail sales rose modestly in January, continuing the trend from a strong holiday shopping season, according to a new federal report.

The U.S. Department of Commerce said on Feb. 14 that in January retail sales rose a seasonally adjusted rate of 0.4 percent. Areas showing the most growth were sporting goods, department stores, home supplies, and electronics.

January auto sales were weak, mainly due to steep discounts offered by auto dealerships. January traditionally has been a strong month for auto sales.

The higher retail sales in January are a welcome sign for economists and analysts. It shows that the U.S. economy is improving, along with modestly improving unemployment rates across the nation.

But that optimism has been muted somewhat by other economic factors. On Feb. 7 in a hearing in Congress, Federal Reserve Chairman Ben Bernanke warned that the economic recovery is still in its infancy and that more stimulus is needed to foster growth. In addition, he said that the current unemployment rate doesn’t count the millions of Americans who have given up looking for a job.

The latest reading of small business optimism has been flat, according to a report by the National Federation of Independent Business (NFIB), which represents a large number of small businesses in the United States.

“The most positive statement that can be made about January’s reading is that the Index did not go down; a change of 0.1 points is essentially no change and it is hardly indicative of a surge in economic activity,” said NFIB Chief Economist Bill Dunkelberg in a statement.

“Nothing happened last month that would significantly improve the small business outlook; Washington is at a stalemate.”