US retail sales rise - DC News FOX 5 DC WTTG

US retail sales rise

Posted: Updated:

WASHINGTON (AP) -- Americans barely spent more last month at retail businesses and restaurants after higher taxes cut their paychecks. The small increase suggests consumer spending may be weak in the January-March quarter, which could hold back economic growth.

Retail sales ticked up 0.1 percent in January from December, the Commerce Department said Wednesday. That follows a 0.5 percent increase in December and is the smallest in three months.

Sales fell at auto dealerships, clothing stores and furniture stores. They rose at home-improvement stores, gas stations and online retailers.

So-called core retail sales, which exclude autos, building materials, and gas stations, ticked up 0.2 percent. Economists pay close attention to core sales because they strip out the most volatile categories.

The retail sales report is the government's first look at consumer spending, which drives 70 percent of economic activity.

Growth is likely to stay weak in part because nearly all working Americans are taking home less pay this year. Congress and the White House allowed a temporary 2 percentage point cut in Social Security taxes to expire last month. That means a person earning $50,000 a year will have about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less.

Top-earning households are also paying higher income taxes this year. While the Obama administration and Congress agreed to prevent income taxes from rising on most Americans, their deal allowed income taxes to rise on individuals earning $400,000 a year and couples earning $450,000 a year.

The Social Security tax increase was a key reason the Conference Board's index of consumer confidence plummeted last month to its lowest level in 14 months. That survey was taken early in the month, when most Americans were discovering their smaller paychecks.

But a separate survey taken later in the month by the University of Michigan suggested consumers weren't quite as dismayed, possibly after absorbing the impact of the tax increase.

Americans may be feeling better about the economy because of improvement in the job market. Employers added an average of 200,000 jobs a month in the final three months of last year, the Labor Department said earlier this month. That was up from just 150,000 in the preceding three months.

And some retail store chains reported healthy sales gains last month, suggesting that at least some consumers kept shopping even after the tax cut kicked in. Some of the gains likely reflected healthy holiday discounts.

Overall, consumer spending grew at a faster pace in the final three months of last year than in the preceding quarter. Still, steep cuts in defense spending and slower company restocking weakened the economy in the fourth quarter.

  • Your MoneyMore>>

  • Envelopes in Marriott hotels invite tips for maids

    Envelopes in Marriott hotels invite tips for maids

    Monday, September 15 2014 8:14 AM EDT2014-09-15 12:14:33 GMT
    Do you leave a tip in your hotel room for the maid?  Marriott is placing envelopes in 160,000 hotel rooms beginning this week to encourage guests to leave tips.
    Do you leave a tip in your hotel room for the maid?  Marriott is placing envelopes in 160,000 hotel rooms beginning this week to encourage guests to leave tips.
  • Housing activists protest Airbnb

    Housing activists protest Airbnb

    Friday, September 12 2014 7:41 PM EDT2014-09-12 23:41:17 GMT
    You've probably seen Airbnb commercials extolling the benefits of homeowners renting out their houses or apartments to out-of-town guests for a fee. Sharing is caring feel-good commercials.But housing activists say Airbnb is reducing available housing in New York City's increasingly expensive and shrinking housing market. They argue Airbnb is pushing thousands of apartments toward use as illegal hotels instead of affordable housing.
    You've probably seen Airbnb commercials extolling the benefits of homeowners renting out their houses or apartments to out-of-town guests for a fee. Sharing is caring feel-good commercials.But housing activists say Airbnb is reducing available housing in New York City's increasingly expensive and shrinking housing market. They argue Airbnb is pushing thousands of apartments toward use as illegal hotels instead of affordable housing.
  • Robot workers are coming

    Robot workers are coming

    Friday, September 12 2014 7:13 PM EDT2014-09-12 23:13:15 GMT
    A life-sized looking and sounding robot named the RoboThespian is an interactive, alert machine powered by algorithms and codes -- a form of artificial intelligence. It's the sort of thing that would have sounded like science fiction a generation ago. These days, robots like this are used mostly in showrooms and for entertainment. But researcher Cadell Last of the Global Brain Institute says that these bots will have a much bigger role and will make up a major part of the workforce.
    A life-sized looking and sounding robot named the RoboThespian is an interactive, alert machine powered by algorithms and codes -- a form of artificial intelligence. It's the sort of thing that would have sounded like science fiction a generation ago. These days, robots like this are used mostly in showrooms and for entertainment. But researcher Cadell Last of the Global Brain Institute says that these bots will have a much bigger role and will make up a major part of the workforce.
Powered by WorldNow
Untitled

WTTG FOX 5 & myfoxdc
5151 Wisconsin Ave. NW
Washington, DC 20016
Main Number: (202) 244-5151
Newsroom: (202) 895-3000
fox5tips@wttg.com

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices