Retail sales stage unexpected rebound

Shoppers look at electronics in a store in New York's Time's Square November 23, 2007. Sales at retailers rose 0.3 percent in January, which was an unexpected pickup that partly reflected stronger sales of new cars and gasoline, according to a Commerce Department report on Wednesday.

WASHINGTON (Reuters) - Sales at retailers rose 0.3 percent in January, which was an unexpected pickup that partly reflected stronger sales of new cars and gasoline, according to a Commerce Department report on Wednesday.

January's sales increase followed a 0.4 percent decline in December and was contrary to Wall Street analysts' forecasts for a 0.2 percent decline.

Excluding autos, January sales still rose 0.3 percent, reversing a 0.3 percent decline in December sales. Wall Street analysts were expecting a 0.2 percent gain in sales excluding autos.

Despite the higher headline number for sales, there were declines in many categories that implied consumer spending was being pinched. Furniture sales fell 0.5 percent in January, building material sales were down 1.7 percent and department store sales declined by 1.1 percent.

Many analysts think the slowing U.S. economy is headed into recession if not already there and are closely watching for signs that consumers, who fuel 70 percent of national economic activity, will keep scaling back spending.

Gasoline sales rose 2 percent in January after being flat in December. But higher sales numbers can simply reflect increased sales prices and the report does not specify whether the volume of gasoline sales was up from December.

Excluding gasoline, January retail sales rose 0.1 percent.

(Reporting by Glenn Somerville, editing by Joanne Morrison)