Sales at US retailers unexpectedly rose 0.3 per cent in January, partly reflecting stronger sales of new cars and gasoline, according to a Commerce Department report today.
January's sales increase followed a 0.4 per cent decline in December and was contrary to Wall Street analysts' forecasts for a 0.2 per cent decline.
The surprise sales rise caused stock futures to jump on hopes it meant the United States had a better chance of skirting a recession.
Prices for US debt securities fell while the dollar's value strengthened against other major currencies.
Excluding autos, January sales still rose 0.3 per cent, reversing a 0.3 per cent decline in December sales. Wall Street analysts were expecting a 0.2 per cent gain in sales excluding autos.
"The data is clearly a surprise to the upside," said Omer Esiner, a market analyst with Ruesch International in Washington, DC "In the near term, it does ease some recession concerns."
Despite the higher headline number for sales, there were declines in many categories that implied consumer spending was being pinched. Furniture sales fell 0.5 per cent in January, building material sales were down 1.7 per cent and department store sales declined by 1.1 per cent.
Many analysts think the slowing US economy faces increasing risks of tumbling into recession and are closely watching for signs that consumers, who fuel 70 per cent of national economic activity, will keep scaling back spending.
Jim Awad, chairman of WP Stewart & Co. Ltd. in New York, said that while the January sales numbers will raise hopes that a recession can be avoided, it may be short-lived because of other indications that consumers are facing pressure as housing prices fall.
"After the impulsive positive buying, people will say this is subject to revision and it's inconsistent with other incoming data indicating softness and weakness in the economy," Mr Awad said.
Gasoline sales rose 2 per cent in January after being flat in December, but analysts said that likely reflected higher prices, not stronger demand.
Excluding petrol, January retail sales rose 0.1 per cent.
A separate report showed mortgage applications fell last week from highest level in nearly four years as mortgage rates rose.