(REUTERS) — Retail sales barely rose in January as tax increases and higher gasoline prices restrained spending, setting up the economy for only modest growth in the first quarter.
The Commerce Department said on Wednesday retail sales edged up 0.1 percent after a 0.5 percent rise in December.
The small increase suggested the expiration of a 2 percent payroll tax cut on January 1 and higher tax rates for wealthier Americans were hurting the economy.
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Still, economists said consumer spending was unlikely to buckle given rising home values, moderate job growth and rallying stock market prices.