Consumer spending on clothing and footwear fell 2.2 percent in January compared to December to $404.3 billion, according to the monthly Personal Income & Outlays report released Friday by the U.S. Bureau of Economic Analysis (BEA).
While that dip is somewhat expected in the post-holiday period, the same pattern did not follow a year earlier, when January 2019 real personal consumption expenditures (PCE) inched up 1.1 percent to $395.83 billion compared to December 2018. January’s decline did follow the recent pattern of up and down swings in monthly consumer spending tracked by BEA.
The decline did follow the January retail sales report from the U.S. Census Bureau that showed clothing and clothing accessory store sales were down 3.1 percent month-over-month seasonally adjusted and off 0.7 percent year-over-year. Overall retail sales, excluding automobile dealers, gasoline stations and restaurants, increased 0.2 percent seasonally adjusted over December and were up 2.7 percent unadjusted year-over-year, according to the National Retail Federation.
BEA’s report showed overall real PCE, adjusted for inflation, increased 0.1 percent, or $12.9 billion in January. This reflected increases of $2.2 billion in spending for goods and $10.3 billion in spending for services. Within goods, new motor vehicles wer the leading contributor to the increase. Within services, the largest contributor to the increase was spending for food services and accommodations.
The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.
Personal income increased 0.6 percent, or $116.5 billion, in January, according to BEA. Disposable personal income (DPI), a key gauge of retail sales, rose 0.6 percent, or $101.4 billion. Real DPI increased 0.5 percent in the month.
The increase in personal income in January primarily reflected increases in compensation of employees and social security benefit payments related to annual cost of living adjustments and other government social benefits to persons, which includes the Affordable Care Act refundable tax credit.
Personal outlays were up $27 billion in January and personal saving was $1.33 trillion. The personal saving rate–personal saving as a percentage of disposable personal income–was 7.9 percent.