Retail sales fell slightly in January, but the drop was due to a falloff in one area.

Wednesday morning the U.S. Commerce Department reported sales fell 0.2% in January, but were up 1.2% when automotive sales are excluded. Auto sales fell 4.3% in January following the end of a sales surge driven by interest-free financing offers.
The figures are better than those expected in a poll of economists conducted by Reuters. They predicted a 0.3% overall drop in January sales, while sales outside of autos were predicted to increase by by 0.4%
The government also revised December retails sales upward from a drop of 0.1% to an increase of 0.2%.
Newport Communications Senior Economist Jim Haughey says while auto sales have fallen, they are still relatively high.
“Manufacturers will still be building depleted inventories at dealers for at least another month, so there has been little if any decline in freight into and out of auto plants,” he said.
During January drug stores and gasoline stations had the largest month to month gains, posting a 5.9% and a 5.0% increase in sales, respectively. Only part of the gas station gain was slightly higher pump prices. There were also strong gains for clothing and accessories stores, increasing 2.5%, and department stores, gaining 2.1%.
Haughey says, “This strong report is consistent with earlier reports of rising consumer confidence in January and a slowing layoff pace. It also promises a further decline in retailer inventories for January which should spur added production."