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Monday, February 14, 2011

Retail Sales Probably Rose in January as Promotions Enticed U.S. Shoppers

Retail sales probably climbed in January as shoppers took advantage of post-holiday promotions before winter storms covered much of the U.S., a sign the economy is on the mend, economists said before a report this week.

The projected 0.5 percent in purchases gain would follow a 0.6 percent December increase, according to the median forecast of 62 economists surveyed by Bloomberg News ahead of Commerce Department figures Feb. 15. Manufacturing expanded, prices were contained, and housing was depressed, other data may show.

Retailers like Gap Inc., Limited Brands Inc. and Macy’s Inc. topped analysts’ estimates for January sales, reinforcing forecasts that household spending, which accounts for about 70 percent of the economy, will keep growing. Even so, the Federal Reserve may complete a second round of monetary stimulus worth $600 billion aimed at spurring growth and cutting unemployment.

“The recovery is becoming more broad-based,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “The Fed is right to pursue its current policy,” he said, because “the improvement in the labor market has been pretty anemic.”

Promotions and clearance items drew customers, helping retailers ring up sales early in the month before snowy weather slowed shopping in the last two weeks, according to David Bassuk, head of the global retail practice at consultant AlixPartners in New York. Winter storms spread from the Midwest and the South to New England, covering 71 percent of the country with snow on Jan. 12, according to the National Climatic Data Center.
Topping Estimate

Sales at stores open at least a year at the more than 30 chains tracked by Retail Metrics climbed 4.4 percent in January for a 17th straight gain, surpassing its estimate of a 2.6 percent increase.

Gap, a clothing retailer based in San Francisco, benefited from higher same-store sales at its Banana Republic stores, while the Victoria’s Secret lingerie chain fueled results at Columbus, Ohio-based Limited. Department store Macy’s sales capped a year of “remarkable achievement in a period of economic uncertainty,” Chief Executive Officer Terry Lundgren said in a Feb. 3 statement.

Investors have driven up retailer shares as spending increases. The Standard & Poor’s Supercomposite Retailing Index, which includes Macy’s and Gap, has gained 34 percent in the 12 months through Feb. 11, compared with a 23 percent advance for the broader S&P 500.

2 comments:

Anonymous said...

Your newspaper seems quiet. Maybe i can add a few comment to color your blog if you approve it.

How come one of your mentor is a property agent now? Forex cannot make money or property agent is more lucrative than trading forex? hahahhahahah

Ash Ariffin said...

Hi Anonymous. Thank you for your comment. To answer your question, depends on which one of my mentors?

One of them is not on good terms but nonetheless, I will still honour him as one of my mentors because I did absorb something from him.

On why he choose to be a property agent, I do not know :)