WASHINGTON — U.S. retail sales rose at a slower pace in January as an increase in payroll taxes took a bite out of consumers’ paychecks.
The 0.1 percent climb followed an unrevised 0.5 percent increase in December, Commerce Department figures showed today in Washington. The advance matched the median forecast of 80 economists surveyed by Bloomberg.
A two percentage-point increase last month in the levy that funds Social Security reduced take-home pay, countering some of the gains in household disposable income from an improving job market.
At the same time, more employment, combined with higher property values and stock prices, supports consumers and adds traction to purchases that make up about 70 percent of the economy, a boon for retailers such as Gap Inc. and Target.
“The payroll tax increase is having some impact on spending here,” said Thomas Simons, an economist with Jefferies Group in New York, whose firm after Wednesday’s report is the second-best forecaster of retail sales for the past two years, according to data compiled by Bloomberg. “It looks like maybe momentum is not necessarily carrying forward into the first quarter. A lot of the data at this point is going to be kind of a mixed bag and difficult to interpret.”
Prices of imported goods rose in January for the first time in three months, led by more expensive fuel and building materials, a report from the Labor Department showed today.
Six of 13 major categories showed gains last month, led by a 1.1 percent jump at general merchandise stores that was the biggest gain since April 2011. Demand at sporting goods merchants and non-store retailers, which include internet outlets, also advanced.
Retail sales excluding autos increased 0.2 percent after rising 0.3 percent in December, the report showed. They were projected to rise 0.1 percent, according to the Bloomberg survey median.
Purchases excluding autos, gasoline and building materials, which are the figures used to calculate gross domestic product, climbed 0.1 percent after increases of 0.7 percent in each of the previous two months. The readings for December and November were revised up from prior estimates indicating consumer spending in the fourth quarter may be stronger than previously estimated.
Household purchases rose at a 2.2 percent annual rate from October through December, up from a 1.6 percent pace in the previous three months, according to figures from the Commerce Department.