US retail sales edge higher in January

US retail sales rose modestly for the third straight month in January despite falling gasoline prices, the Commerce Department reported Friday.

Shoppers spent 0.2 percent more on retail and food services, following an upwardly revised 0.2 percent increase in December.

Retail sales totaled $449.9 billion in January, up 3.4 percent from a year ago, according to the data that is not adjusted for price changes.

The January and December growth numbers were suggest "consumer spending may not be as weak as thought, especially given the lack of inflation," said Scott Hoyt of Moody's Analytics.

The January data showed a 3.1 percent drop in gasoline sales at the pump.

Auto sales rose 0.6 percent; ex-auto, retail sales were up a meager 0.1 percent.

Sales in general merchandise stores rose 0.8 percent, almost wiping out December's decline, but department stores saw sales fall 0.8 percent.

Online retailers rang up a 1.6 percent gain in January, when severe snowstorms blanketed the populous Northeast for a few weeks.

The retail sales data offer a gauge on the health of consumer spending, the main driver of the US economy, and for Ian Shepherdson of Pantheon Macroeconomics, the January report "looks like a solid start" for the first quarter of the year.

"With goods prices falling, thanks to the strong dollar, the real increase will be a bit higher still," he said in client note.

"This doesn't guarantee a strong number for total consumption, because retail sales are less than half of all spending, but it is now much more likely."