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U.S. Jewelry & Watch Sales Growth Weakens to 1%

Sector Sales Growth Revised Lower for December

Mar 3, 2014 11:05 AM   By Jeff Miller
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RAPAPORT... U.S. jewelry and watch sales were off to a  weak start this year as preliminary sales for the sector increased only 1 percent year on year in January compared with a growth rate of 9 percent one year ago.

Furthermore, government figures were revised lower for jewelry and watch sales in both December and November 2013. 

Jewelry sales in January increased 1.2 percent year on year to $4.163 billion, while watch sales improved 1.3 percent to $557 million, according to Rapaport News estimates.  (Read more following the chart.)

jewelry sales

What did help to brighten January's weaker sales increase, however, was the continuation of benign consumer price inflation (CPI) specifically for jewelry. The CPI in January actually fell 1.7 percent year on year, following a 1 percent decline in December and  a 0.4 percent drop for the whole of 2013.

The rate of sales growth for jewelry and watches in December was cut to 2.5 percent from a preliminary increase of 6 percent and sector revenue of $15.696 billion. The rate of growth for November was revised to 6.9 percent from 9.8 percent with sales of $7.255 billion. The  impact on jewelry and watch sales growth for 2013 was slightly weaker, although still strong, as U.S. jewelry sales increased 6.7 percent year on year to $70.651 billion, while watch sales improved 7.6 percent to $9.464 billion as opposed to earlier growth projections of 7.7 percent and 8.1 percent, respectively.  (Story continues after the chart.)

watches retail sales

By comparison, advanced estimates for department store sales in January continued to show weakness as revenue declined 3.9 percent year on year to $11.232 billion. However, total retail sales in the U.S. during January improved 2.6 percent to $427.8 billion, while retail trade sales also rose 2.6 percent. Nonstore retail sales jumped 6.5 percent compared with January 2013.

Reflecting on January's retail sales trends, Lindsey Piegza, the chief economist for Sterne Agee, said that consumers continued to lose momentum and poor weather conditions in some parts of the country did not help.

''In the long run, positive spending patterns can only be supported by underlying growth in jobs and income. We have seen the quantity of jobs continue to increase - although at a disappointing pace as of late - however, we have not seen quality job creation leading to income growth, as the vast majority of the jobs created have been in part-time or low-wage sectors,'' Piegza wrote in a client note.

''Consumers were able to spend through the fourth quarter thanks in part to temporary factors like energy price reprieve and a lingering wealth effect from rising equity markets luring consumers out to spend and draw down their savings. But going forward, with rising energy prices expected to cost the average consumer an extra $500 to $1,000 more this winter season to heat their home and fill up the family car, without income growth, consumption will remain under pressure. Also this morning, initial jobless claims rose 8,000 to 339,000 in the week ending February 8. On a four-week moving average claims rose from 333,000 to 337,000 still remaining with the tight range of the past year,'' Piegza said.

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Tags: annual, consumer price inflation, growth, january, Jeff Miller, Jewelry, retail sales, revisions, watches
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