Retail Sales Probably Climbed in January: U.S. Economy Preview

The rebound in spending that gave U.S. retailers a lift during the holiday season probably carried over into the new year, signaling consumers may contribute more to growth, economists said before reports this week.

Sales climbed 0.3 percent in January, the third gain in four months, according to the median forecast of 51 economists surveyed by Bloomberg News before Commerce Department figures Feb. 11. Another report may show the trade gap fell in December.

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A drop in unemployment last month, combined with a longer workweek and rising wages, signals the economy is poised to generate jobs, leading to gains in income that may boost sales at companies like Macy’s Inc. and Gap Inc. Retailers have kept inventories in check, resulting in fewer markdowns that point to increases in volumes and profit margins.

“Consumers have shown an increased willingness to spend,” said Maxwell Clarke, chief U.S. economist at IDEAglobal in New York. “We see improved prospects stemming from gradual stabilization in labor markets.”

Auto sales probably cooled last month, restraining the overall increase, economists said. Vehicles sales fell in January after three months of gains, industry figures showed last week.

Excluding automobiles, sales probably rose 0.5 percent after a 0.2 percent decrease the previous month, according to the survey median.

Sales at Macy’s

Macy’s, the second-largest U.S. department-store company, said in a statement last week that sales at stores open at least a year gained 3.4 percent in January, helped by online purchasing. The Cincinnati-based retailer said fourth-quarter profit exceeded its forecast.

Purchases at 31 chains rose 3 percent last month, the International Council of Shopping Centers said Feb. 4, beating the 1 percent increase the group anticipated.

The jobless rate unexpectedly fell to 9.7 percent last month from 10 percent in December, figures from the Labor Department showed last week. The median forecast of economists surveyed anticipated no change.

A 20,000 drop in payrolls served as a reminder that the labor market has yet to fully recover.

The U.S. economy, the world’s largest, expanded 5.7 percent in the last three months of 2009, the most in six years, the Commerce Department said last month. Consumer spending grew 2 percent during that period.

As the economy expanded in the second half of last year, the Standard & Poor’s 500 Index rose 21 percent. Stocks have declined 4.4 percent since the beginning of the year as China stepped up efforts to curb lending, the Obama administration proposed rules to rein in risk-taking at banks and concern grew over government debt levels in Greece, Spain and Portugal.

Business Investment

Manufacturing gains, spurred by business investment in new equipment and growth overseas, probably boosted U.S. exports, helping to narrow the trade gap, economists project a Feb. 10 report from the Commerce Department will show. The deficit probably shrank to $35.5 billion in December from $36.4 billion the prior month, according to the survey median.

Inventories in the U.S. probably rose in December for a third straight month, economists said ahead of a Feb. 11 Commerce Department report. Stockpiles increased 0.3 percent after 0.4 percent in November as businesses gained confidence in the strength of the U.S. recovery, the survey showed.

Consumers may also be turning more confident. The Reuters/University of Michigan preliminary sentiment index for February, due Feb. 12, probably rose to 75, the highest level since January 2008, from 74.4 last month, the survey showed.

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