U.S. retail sales last month were expected to decline three-tenths of a percentage point from December 2004, and that's exactly what they did. On a seasonally adjusted basis, retail sales totaled $347.7 billion in January, the U.S. Commerce Department reported on Feb. 15. The retail sales data "reaffirmed our view that consumer spending growth in the first quarter [of 2005] will be considerably slower than the 4.3% pace set in the fourth quarter" of 2004," says Merrill Lynch & Co., New York.
The Commerce Department also reported on Feb. 15 that U.S. business inventories were a seasonally adjusted $1.278 trillion at the end of December 2004. That represents a two-tenths of a percentage point increase, exactly what economists expected, from the November 2004 end-of-the-month figure. In addition to manufacturing, business inventories include retailers and merchant wholesalers.