US retail sales continued to disappoint at the start of the new year, at least the headline figure. On a monthly basis, retail sales rose by 0.4% M/M, only half the expected pace. The weaker than expected outcome was due to a drop in sales of motor vehicles and parts (-1.1% M/M), while most had expected a rebound in this component based on the unit car sales figures released earlier in the month. Also non-store retailing (-1.1% M/M) and sales of health & personal care (-0.3% M/M) and furniture (-0.2% M/M) dropped in January. Strength was based in general merchandise (2.0% M/M), sales at gasoline stations (1.4% M/M), sales of food & beverages (1.3% M/M), sporting goods (1.1% M/M), eating & drinking (0.6% M/M), electronics (0.5% M/M) and building materials (0.2% M/M). As a result, core retail sales excluding autos and gas, rose by 0.6% M/M, marginally stronger than expected, while the previous figure was downwardly revised from 0.0% M/M to -0.2% M/M. Although the headline figure is somewhat weaker than expected, the core reading surprised on the upside of expectations, with the “control group” rising by 0.7% M/M supported by discounting after the Christmas holidays.