US retail sales growth in January beat expectations according to the latest figures, boosting hopes that economic recovery is underway.

New data from the Commerce Department and the National Retail Federation (NRF) shows retail sales in January were 0.5% higher than December.

But they point to a 1.7% drop in sales at clothing and clothing accessory stores as shoppers took advantage of special clearance deals on popular apparel items.

"We continue to see the economy show subtle signs of improvement," said Rosalind Wells, chief economist for NRF.

"While the recovery still has a long way to go, we remain encouraged by the latest retail sales figures."