Ahead of the Bell: Retail Sales

(AP) — Retail sales likely posted a modest gain in January after slipping in December.

Economists surveyed by Thomson Reuters expect retail sales to show 0.3 percent advance in January following a 0.3 percent dip in December. The report will be released at 8:30 a.m. EST by the Commerce Department.

Retail sales excluding autos are expected to show an increase of 0.5 percent, which would represent a rebound from a 0.2 percent drop in December.

The hope is that consumer spending will help put the economy onto a sustained growth path following the deepest recession since the 1930s.

The overall economy grew at an annual rate of 5.7 percent in the October-December quarter after a 2.2 percent increase in the July-September period. Those represented the first positive gains in the gross domestic product after four consecutive declines.

Consumer spending is closely watched because it accounts for 70 percent of total economic activity. The worry is that consumers, still struggling with high unemployment, shredded investment savings and tight borrowing standards, will falter in their spending in the months ahead.

However, the Labor Department reported Thursday that the number of newly laid-off workers filing claims for unemployment benefits dropped by 43,000 last week, a bigger-than-expected decline that raised hopes that the job market may be improving.

The government reported last week that the unemployment rate fell to 9.7 percent in January from 10 percent in December. It was the first improvement in seven months but it still left joblessness much higher than when the recession began in December 2007. Since that time, 8.4 million workers have lost jobs.

The expectation for an increase in retail sales in January reflected reports of moderate gains in activity at the nation's chain stores during the month with particular strength at clothing stores and high-end department stores.

Economists at IHS Global Insight also said sales should be supported by a rise in gasoline prices during the month. But they forecast that auto sales would decline, reflecting declines at Toyota, which has been hurt by recalls of some of its most popular models because of safety concerns.