Weak January retail sales: Sign of consumer financial stress -- or just the weather?

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U.S. consumers spent less in January than analysts had expected, with retail sales rising 0.3% from December instead of the 0.5% rise that was economists’ consensus forecast.

The question is whether people cut back because they felt strapped for cash or whether they were mostly holed up at home because of the relentless winter storms that hit much of the country.

Consumer spending fueled the economy’s acceleration in the fourth quarter from the third quarter, and with the stock market near multiyear highs, Wall Street clearly has been counting on that momentum spilling into the first quarter -- particularly given the Social Security tax cut that showed up in workers’ paychecks last month.

So, blame Old Man Winter for January’s disappointment? Many economists are leaning that way. The government’s breakdown of sales by category provides “clear evidence of weather effects,” economists at Goldman Sachs said in a note Tuesday.

Case in point: Sales of building materials sank 2.9% for the month, the biggest decline of any category. You’d expect home improvements to be a casualty of weather delays.

Also, sales of sporting goods fell 1.3% for the month. Those kinds of purchases also could easily fall victim to weather issues.

Same with spending at restaurants and bars, which declined 0.7% for the month.

By contrast, sales at grocery stores were up 1.4% in January, and general-merchandise retailers saw a 0.8% rise in sales. Those increases suggest that people got out of the house to buy what they needed, even if more discretionary purchases were delayed.

Another sign that many Americans still were shopping in January: Sales at non-store retailers (i.e., online retailers) advanced 1.2% for the month.

Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi in New York, noted that the weakness in January sales overall was boosting expectations for a February rebound, assuming that pent-up demand would have to be satisfied.

Home Depot said Tuesday it would hire more than 60,000 temporary workers for what it expects to be the traditional spring sales rush in its business.

Still, Zentner wonders whether five straight months of rising gasoline prices are taking a serious toll on consumers’ wherewithal to spend on other things. Total retail sales were up 0.8% in November, then decelerated to a 0.5% gain in December. The latter was revised down Tuesday from the originally reported 0.6% increase. January marks a further deceleration.

Zentner suggests watching restaurant and bar sales in February as an indicator of consumers’ ability to keep spending. “Eating out is one of the first categories that families will cut back on when gas prices are rising,” she said.

-- Tom Petruno