The sales rise, which had not been expected, followed a 0.4% decline in December, data from the Commerce Department showed.

Analysts had predicted a 0.2% decline in January.

The US Federal Reserve has lowered interest rates in past months to boost economic activity and analysts said the figures would not delay further cuts.

"The data is clearly a surprise US homeowners 'to get extra help' ...
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"I don't think it changes the outlook for further rate cuts. But in the near term, it does ease some recession concerns."

When volatile petrol sales are stripped out, overall retail sales rose by 0.1%, the Commerce Department said.

'Not so strong'

Consumer spending accounts for about two-thirds of economic activity in the US and it is bieng monitored carefully for indications of whether the country is falling into a recession.

Declines in some sales areas suggested that customers were still tightening their belts, analysts said.

Furniture sales dropped 0.5% in January, while department store sales slipped by 1.1%.

And reflecting the continued slowdown in the housing market, sales of building materials fell 1.7%.

"Some of the details were not so strong," said US interest rate strategist at Credit Suisse in New York, Carl Lantz.

"Gas (petrol) was a big add. Excluding autos and gas it was actually flat on the month."

(BBC)

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