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The New Economy

US sees retail sales rise unexpectedly

By / February 12, 2009

Consumers are helping to boost sales of retailers, like this Wal-Mart store in Cleveland.

Tony Dejak/AP

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It's not love. It's not even a great Valentine's Day present.

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Nevertheless, Americans offered retailers a candy heart of good news by going out and shopping with a little more verve.

Retail sales jumped a better-than-expected 1 percent in January to $344.6 billion compared with December, the Census Bureau reported Thursday. Some of the seasonally adjusted rise was predictable because the December numbers were so bad. Compared with January 2008, sales were still down 9.7 percent.

Strength was broad-based

Still, the jump was strong and across a broad spectrum: cars and car parts, up 1.6 percent: food and beverage stores, up 2.1 percent; general merchandise stores, up 1.1 percent; and nonstore retailers, up 2.7 percent.

The strength in those sectors – and a jump of 2.6 percent at gas stations because of higher gasoline prices – overcame weakness in building materials and garden-equipment, furniture, and sporting goods.

Just a blip?

Don't expect the Valentine warmth to continue, analysts say. The higher sales were driven by big discounts and promotions, which cleared out inventory.

But regular retailers can't price-cut their way out of an economic slump, driven by jobs cuts and recession thinking. Big discounters already own that space, along an emerging Wal-Mart-Target divide. (Click here for a look at who's shopping where.)

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