US Retail Sales Surge in January, Exceeding Expectations
By On Wednesday, the Commerce Department reported that retail sales in the United States rose by 3.0% in January, compared to the 1.8% expectation from Refinitiv economists.[0] This marks the biggest monthly increase since March 2021 and is well above the 1.8% estimate, indicating that consumer spending remains strong despite rising inflation and interest rates.
Excluding autos, sales rose 2.3%, according to the report.[1] Compared to the same period last year, retail sales rose 6.4%, matching the consumer price index reported on Tuesday.[1] This figure indicates that all of the increase in retail sales can be accounted for by inflation.[2]
The biggest increases in spending were at department stores (17.5%), food services and drinking places (7.2%), and auto dealers (6.4%).[3] In total, retail sales increased 6.7% compared to the same month a year earlier.[2] These numbers suggest that consumers are spending more despite inflation, though their dollars are buying them less than before.
The Federal Reserve has been hiking interest rates in an effort to cool the economy and ease inflation.[4] Investors are worried that high interest rates could lead to a downturn in the U.S. economy, and they hope that the Federal Reserve will not increase rates in 2019.[4] The Federal Reserve is anticipated to raise the interest rate by a quarter of a percent in the next two meetings, then pause to analyze the effect of the monetary policy adjustments on inflation, employment and the overall economic expansion.[1]
0. “U.S. retail sales climb by 3.0% in January By Investing.com” Investing.com, 15 Feb. 2023, https://www.investing.com/news/economic-indicators/us-retail-sales-climb-by-30-in-january-3004176
1. “Retail sales jump 3% in January, smashing expectations despite inflation increase” CNBC, 15 Feb. 2023, https://www.cnbc.com/2023/02/15/retail-sales-january-2023-.html
2. “The Dark Side of January’s Big Retail Sales Print” SchiffGold, 16 Feb. 2023, https://schiffgold.com/key-gold-news/the-dark-side-of-januarys-big-retail-sales-print/
3. “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
4. “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
