US Retail Sales Jump 3% in January, Outpacing Expectations
US retail sales rose in January by the biggest amount in nearly two years, fueled by strong consumer spending despite rising inflation pressures. The Commerce Department reported Wednesday that retail sales climbed 3% in January, following a 1.1% drop in December. Excluding automobiles, gasoline, building materials, and food services, retail sales rose 1.7%, beating economists’ expectations of a 0.8% increase.
The data suggests that the US economy is continuing to expand despite the rise in inflation, which the Labor Department reported Tuesday was up 6.4% from a year ago. The rise in inflation has led the Federal Reserve to consider raising interest rates, which could have a dampening effect on consumer spending.
The retail sales report showed that spending at bars and restaurants was up 7.2% in January, while auto sales rose 5.9%. Core retail sales, which excludes gasoline and autos, rose 2.3%, compared to estimates of 0.8%. The control group, which strips out autos, gas, building materials, and food services, rose 1.7%, higher than the expected 0.8% increase.
Overall, the data suggests that consumer spending remains resilient despite a challenging macroeconomic environment. The Federal Reserve will likely take note of the strong retail sales figures, and consider them supportive of their ongoing war against inflation.
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1. “Gold price drops below $1850 as U.S. retail sales surprise on the upside in January” Kitco NEWS, 15 Feb. 2023, https://www.kitco.com/news/2023-02-15/Gold-price-drops-below-1-850-as-U-S-retail-sales-surprise-on-the-upside-in-January.html
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