Retail sales up despite payroll tax hike

Higher payroll taxes didn't stop U.S. consumers from hitting the malls in January.

Overall, retail sales rose 0.1 percent during the month, according to the Census Bureau.

While this is a slowdown from the 0.5 percent increase in December sales, the gain was in line with expectations. Economists were expecting consumers to pull back as the payroll tax cut expired, causing workers to receive slightly lower paychecks.

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General merchandise stores posted remarkably strong sales though. Sales at department stores in January increased 1 percent from December.

Large publicly traded retailers, such as Target, Nordstrom and Macy's, have all reported solid gains in sales recently.

"Our guests continue to shop with discipline in the face of a slow economic recovery and new pressures, including recent payroll tax increases," Target CEO Gregg Steinhafel, said in a statement last week.

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Other categories were not as robust. Motor vehicle sales fell slightly, as did sales at furniture stores and health and personal care stores. Sales at food services and drinking places were flat during the month.

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