US Retail Sales Surge 3% in January, Defying Inflation Pressures
By 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.[0] 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.[1]
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.[2]
The retail sales report showed that spending at bars and restaurants was up 7.2% in January, while auto sales rose 5.9%.[3] Core retail sales, which excludes gasoline and autos, rose 2.3%, compared to estimates of 0.8%.[4] The control group, which strips out autos, gas, building materials, and food services, rose 1.7%, higher than the expected 0.8% increase.[1]
Overall, the data suggests that consumer spending remains resilient despite a challenging macroeconomic environment.[5] The Federal Reserve will likely take note of the strong retail sales figures, and consider them supportive of their ongoing war against inflation.[6]
0. “Retail sales jumped by 3% in January, the biggest gain in nearly two years” CNN, 15 Feb. 2023, https://www.cnn.com/2023/02/15/economy/retail-sales-january/index.html
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
2. “Treasury yields rise as investors digest latest retail sales, inflation data” CNBC, 15 Feb. 2023, https://www.cnbc.com/2023/02/15/us-treasury-yields-investors-digest-latest-inflation-data.html
3. “Stock Market Today: Stocks Close Up After Strong Retail Sales Data” Kiplinger's Personal Finance, 15 Feb. 2023, https://www.kiplinger.com/investing/stocks/stock-market-today-021523-stocks-close-up-after-strong-retail-sales-data
4. “US Retail Sales Jump by Most in Nearly Two Years in Broad Gain” Bloomberg, 15 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-15/us-retail-sales-jump-by-most-in-nearly-two-years-in-broad-gain
5. “Retail Sales Surged in January. That's Bad for the Fed.” Barron's, 15 Feb. 2023, https://www.barrons.com/articles/january-us-retail-sales-report-today-194c7e25
6. “US Retail Sales Beat Expectations, US Dollar (DXY) Continues to Move Higher” DailyFX, 15 Feb. 2023, https://www.dailyfx.com/news/us-retail-sales-beat-expectations-us-dollar-dxy-continues-to-move-higher-20230215.html
