WASHINGTON - Sales at U.S. retailers probably grew in January as an improving job market helped consumers overcome higher payroll taxes, economists said before a report this morning.
The projected 0.1 percent rise would follow a 0.5 percent December increase, according to the median forecast in a Bloomberg survey of 80 economists. Other reports may show import prices and business inventories climbed.
Retailers such as Gap Inc. and Target Corp. are getting a sales boost as job gains support disposable income, helping temper the effects of the tax increase last month. Higher property values and stock prices are also bolstering household resources and spending, which makes up about 70 percent of the economy.
The impact of the tax increase “remains uncertain because of other positive effects,” said Robert Dye, chief economist at Comerica Inc. in Dallas. “We’re seeing positive wealth effects from increased home prices and, to a lesser extent, from higher equity prices.”
The Commerce Department’s retail sales data is scheduled to be released at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from a drop of 0.7 percent to a gain of 0.6 percent.
Economists also project import prices climbed in January for the first time in three months as fuel costs rebounded. The Labor Department figures are also due at 8:30 a.m.
At 10 a.m., figures from the Commerce Department will show stockpiles climbed 0.2 percent in December following a 0.3 percent increase a month earlier, according to the Bloomberg survey median.
Retailers last month were able to sustain holiday-season gains, figures released last week show. Same-store sales for the more than 20 companies tracked by researcher Retail Metrics Inc. surged 4.5 percent in January, the biggest year-to-year gain since September 2011.
San Francisco-based Gap, the largest U.S. apparel chain, posted an 8 percent gain in sales, double the average estimate of 4 percent in a survey by Retail Metrics. Minneapolis-based Target, the second-largest U.S. discounter, posted a gain of 3.1 percent, above projections of 1.7 percent.
Consumers are getting a lift from progress in the labor market even as Congress allowed the tax that funds Social Security to revert to its 2010 level of 6.2 percent from 4.2 percent starting in January. A worker earning $50,000 a year is taking home about $83 less a month because of the higher levy.
Employers added 157,000 workers in January after a revised 196,000 rise the prior month and a 247,000 surge in November, Labor Department data showed Feb. 1. Revisions added a total of 127,000 jobs in the last two months of 2012.
Demand for automobiles, as consumers replace older cars and trucks, is benefiting automakers such as Ford Motor Co. and General Motors Co.
Cars and light trucks sold at a 15.2 million annual rate in January after 15.3 million in December, according to data from Ward’s Automotive Group. Ford’s deliveries of cars and light trucks surged 22 percent last month and General Motors sales climbed 16 percent, the companies reported Feb. 1.
Households are trying to sustain gains after spending picked up at the end of 2012. Purchases climbed at a 2.2 percent annual rate in the final three months of 2012, up from 1.6 percent in the third quarter, Commerce Department data show.
While the improving job market will help, rising gasoline prices combined with the payroll tax increase and delayed income-tax refunds still represent hurdles.
The average price of a gallon of regular gasoline at the pump climbed to $3.60 on Feb. 11, the highest in almost four months, according to AAA, the biggest U.S. motoring group.
Additionally, the Internal Revenue Service did not begin accepting and processing 2012 returns until Jan. 30, later than its original Jan. 22 electronic filing start date, due to Congress’ last-minute Jan. 1 tax deal. That, combined with the IRS’s efforts to prevent fraud, may slow refunds.
PBN is now accepting applications for its newest award program and event for RI & Bristol County to celebrate the Manufacturing Renaissance that is evolving regionally and across the country. The deadline for applications is March 20th.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.