Retail sales get a boost online

NEW YORK (CNNMoney.com) -- Retail sales rose in January, driven by strength in discount retailers and online merchants, according to a government report Friday.

The Commerce Department said total retail sales edged up 0.5% to $355.8 billion last month, compared with December's revised decline of 0.1%. Economists surveyed by Briefing.com had anticipated that January sales would grow 0.3%.

The year-to-year increase was more impressive. January retail sales jumped 4.7%, compared to the same month in 2009.

Consumer spending accounts for two-thirds of U.S. economic activity, and related reports such as retail sales are used to gauge whether a recovery is underway.

Sales excluding autos and auto parts rose 0.6% last month. A consensus of economists had projected ex-auto sales to rise 0.5% in January.

"This is decent news considering just how bad the labor market is," said Adam York, an economist at Wells Fargo. "We had gains in most of the categories and the real strength was in general merchandise sales, so it looks like the consumers are just out there shopping again."

General merchandise store sales rose 1.5% in January, rebounding from a 1.1% drop in the prior month, and department store sales were up 0.2% after a 0.4% decline in December.

Non-store sales, which include online retailers, jumped 1.6% last month, following a 2.2% increase in December.

"We saw a good game in online sales, but it's in line with what's been going on," said York. "February online retail sales will be interesting, because we'll see if people were shopping from home while they were snowed in."

While retail sales in February may be weak given the recent snowstorms in the Northeast, he said he expects sales to improve further into the year.

"We're looking for fairly modest gains in personal consumption and sales, but consumers are not going to come roaring back," he said. "With the weakness in the labor market, it's going to be difficult to see a sustained growth path in consumption."

In a separate report earlier this month, sales tracker Thomson Reuters, which looks at monthly same-store sales for 30 chains including Costco (COST, Fortune 500) and Target (TGT, Fortune 500), said January sales rose 3.3%, beating analyst expectations.