Ahead of the Bell: Retail Sales
WASHINGTON – Americans likely boosted retail sales for a seventh consecutive month in January, as tax cuts prompted more to buy cars and shop after the holidays.
The consensus view of economists is that retail sales rose 0.6 percent in January. The Commerce Department is scheduled to release the new report at 8:30 a.m. Tuesday.
In December, retail sales rose 0.6 percent to $381 billion. The increase boosted sales 13.5 percent above the recession low hit in December 2008.
Consumer spending, which had lagged at the beginning of the recovery, has picked up recently, helping to bolster overall growth. Retailers enjoyed their best holiday shopping season in six years.
The hope is that a slowly improving job market and government tax relief will keep consumers spending in 2011. In December, Congress approved a one-year Social Security tax cut, which economists believe will give a boost to consumer spending.
Consumers didn't let major snowstorms deter them from shopping in January. Big retailers Costco, Victoria's Secret and Macy's all reported surprisingly strong sales during the month.
The nation's automakers reported January sales of cars and light trucks rose 17 percent from a year ago.
Consumer confidence surveys have been posting gains, following the rise in the stock market and declines in unemployment. People are also spending more despite continued troubles in housing markets and rising prices for gasoline and food.
An Associated Press survey of top economists found them predicting that consumer spending will grow by 3.2 percent in 2011, a significant pickup from the 1.8 percent increase in spending for all of 2010. Economists closely watch consumer spending since it accounts for 70 percent of total economic activity.