US retail sales rise - New York News

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>>

  • Bed bug infestation at money firm PIMCO, report says

    Bed bug infestation at money firm PIMCO, report says

    Wednesday, August 20 2014 6:55 PM EDT2014-08-20 22:55:02 GMT
    A big money management firm in New York City has been hit with a major infestation of bed bugs, according to Fox Business Network. Stock traders who do business with Pacific Investment Management Co., better known as PIMCO, told Fox Business' Charles Gasparino that hundreds of people have been relocated from one of the firm's buildings in New York City to an undisclosed upstate location after reports of widespread bed bug bites among executives and employees.
    A big money management firm in New York City has been hit with a major infestation of bed bugs, according to Fox Business Network. Stock traders who do business with Pacific Investment Management Co., better known as PIMCO, told Fox Business' Charles Gasparino that hundreds of people have been relocated from one of the firm's buildings in New York City to an undisclosed upstate location after reports of widespread bed bug bites among executives and employees.
  • Five Guys offers bacon milkshakes

    Five Guys offers bacon milkshakes

    Wednesday, August 20 2014 6:47 PM EDT2014-08-20 22:47:08 GMT
    Burger chain Five Guys is testing the adage that everything tastes better with bacon. It is rolling out a customizable milkshake program and along with bananas, peanut butter, Oreo cookies, salted caramel, you can chose bacon.  Yes that's right: a bacon milkshake.
    Burger chain Five Guys is testing the adage that everything tastes better with bacon. It is rolling out a customizable milkshake program and along with bananas, peanut butter, Oreo cookies, salted caramel, you can chose bacon.  Yes that's right: a bacon milkshake.
  • Designer clothes at giant thrift shop in NJ

    Designer clothes at giant thrift shop in NJ

    Wednesday, August 20 2014 5:57 PM EDT2014-08-20 21:57:04 GMT
    Like most soon-to-be third graders, Sonja knows what she's looking for when it comes to back-to-school shopping. For kids trying to be fashionable -- and parents looking to keep it affordable -- there's the Ocean County Hunger Relief Warehouse in Toms River, New Jersey. It's basically a huge thrift shop.
    Like most soon-to-be third graders, Sonja knows what she's looking for when it comes to back-to-school shopping. For kids trying to be fashionable -- and parents looking to keep it affordable -- there's the Ocean County Hunger Relief Warehouse in Toms River, New Jersey. It's basically a huge thrift shop.
  • Local NewsLocal NewsMore>>

  • Savion Glover, the master teacher

    Savion Glover, the master teacher

    Wednesday, August 20 2014 10:31 PM EDT2014-08-21 02:31:51 GMT
    While the rest of us merely march to the beat of our own drum, Savion Glover is the drum. The tap dance superstar has dazzled audiences from the small screen to the big screen from the White House to the Great White Way. More than just a legend, Savion has become a curator of tap. He is on a mission to keep the craft sacred for future generations.
    While the rest of us merely march to the beat of our own drum, Savion Glover is the drum. The tap dance superstar has dazzled audiences from the small screen to the big screen from the White House to the Great White Way. More than just a legend, Savion has become a curator of tap. He is on a mission to keep the craft sacred for future generations.
  • Fatal boat explosion on Long Island

    Fatal boat explosion on Long Island

    Wednesday, August 20 2014 9:56 PM EDT2014-08-21 01:56:27 GMT
    Detectives from the Nassau County Homicide Squad are investigating an explosion that destroyed a boat, burned two docks, and killed one person in Manorhaven on Wednesday afternoon. Two dock workers and two boaters were gassing up a docked 33-foot Carver motor boat just after 2:45 p.m. when an explosion tore through the boat, setting it and the dock on fire, police said.
    Detectives from the Nassau County Homicide Squad are investigating an explosion that destroyed a boat, burned two docks, and killed one person in Manorhaven on Wednesday afternoon. Two dock workers and two boaters were gassing up a docked 33-foot Carver motor boat just after 2:45 p.m. when an explosion tore through the boat, setting it and the dock on fire, police said.
  • Helmsley Building lights up in gold

    Going gold for pediatric cancer research

    Going gold for pediatric cancer research

    Wednesday, August 20 2014 9:22 PM EDT2014-08-21 01:22:24 GMT
    The Helmsley Building in Manhattan went gold Wednesday night in honor of children with cancer. The owners also plan to do the same in September for Pediatric Cancer Awareness Month.Other city landmarks that will go gold next month include Times Square, the Coney Island Parachute jump, and all of Bay Ridge, Brooklyn.
    The Helmsley Building in Manhattan went gold Wednesday night in honor of children with cancer. The owners also plan to do the same in September for Pediatric Cancer Awareness Month.Other city landmarks that will go gold next month include Times Square, the Coney Island Parachute jump, and all of Bay Ridge, Brooklyn.
Powered by WorldNow
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