Major U.S. retailers reported above-expected January sales, despite bad weather in much of the country and continuing concerns about high unemployment and a slow economic recovery.
The International Council of Shopping Centers index of 32 retailers showed a 4.8 percent increase for January in stores open at least a year. The increase was well above the 1.5 percent to 2 percent range projected earlier in the week.
Consumer spending, which accounts for two-thirds of U.S. economic activity, is closely watched as an indicator of the overall economy and of domestic and import transportation volume.
By The Numbers: U.S. Retail Inventory to Sales Ratio
Retail demand will have a strong influence on annual shipper-carrier negotiations for trans-Pacific container service. Those negotiations are in early stages for contracts that generally expire around May 1.
Thomson Reuters said its data showed retailers posted a 4.2 percent increase in same-store sales, exceeding the 3.3 percent increase in January 2010.
January is usually the slowest month for retailers, which typically use the month to clear out winter merchandise to make room for spring inventory. There was concern that severe winter weather in parts of the country would hurt sales.
"Retailers weathered the storm both literally and figuratively," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. "It is a signal that underlying consumer demand is pretty solid."
January’s sales index was boosted by Limited Brands and Cosco, which contributed about 1.7 percentage points to the ICSC index. Limited’s same-store sales were up 24 percent year-to-year. Cosco’s rose 7.5 percent.
Target posted a 1.7 increase that was below analysts’ expectations. J.C. Penny reported a 1.2 percent decline it blamed largely on weather that kept shoppers home.
Economists have said unemployment levels hovering above 9 percent will restrain consumer spending this year. There was good news on the jobs front Thursday as the Labor Department said the number of Americans filing first-time claims for unemployment insurance dropped by 42,000 to 415,000 in the week ended Jan. 29.
The Labor Department also reported that workers’ productivity rose at a faster rate in the fourth quarter, with employee output per hour rising at a 2.6 percent annual rate compared with a revised 2.4 percent increase in the previous three months.
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