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US sales strong despite auto reverse

US car sales - Sharp January drop
US car sales - Sharp January drop

US retail sales dipped 0.3% in January as car sales fell sharply, but excluding this volatile sector, sales gained a healthy 0.6%.

While overall sales turned in their weakest performance since August, the gain outside of cars surpassed Wall Street expectations for a 0.4% climb and marked the strongest monthly rise since October.

Analysts said the data showed that consumer spending - while slowing from 2004's robust pace - was on a solid footing and economic growth off to a good start in 2005.

The Commerce Department said sales of cars and parts fell 3.3% in January, partly reversing December's 4% surge. Sales at clothing stores and petrol stations surged 1.8%, while general merchandise sales rose 0.9%.

Two separate reports showed sales at US chain stores rising, as increased customer traffic at discount and department stores continued to drive demand.