US Retail Sales Surpass Market Expectations, Rebound from Holiday Shopping Slowdown
By Retail Sales in the US rose by 3%, surpassing the market expectation of 1.8%, according to the US Census Bureau's report on Wednesday.[0] This reading followed December's decrease of 1.1%.[0] The total sales for the November 2022 through January 2023 period were up 6.1% from the same period a year ago, while retail trade sales were up 2.3% from December 2022 and 3.9% above last year.[1]
The US Dollar gathered strength with the initial reaction and the good news was supported by the Mastercard SpendingPulse insights.[0] Jewelry sector also experienced growth of 6.5% after nine months of stagnant growth, potentially reflecting early Valentine’s Day shopping.[2] Credit and debit card spending per household was up 5.1% over the year in January, compared to just 2.2% in December, which indicates a rebound from a lackluster holiday shopping season.[3]
According to the report, US consumer spending has stayed strong even after a deceleration in 2022, likely due to a sturdy labor market, wage increases, and indications that inflationary pressures could be improving.[4] The primary factor driving spending decisions is income – not just income today but the expectation for income tomorrow – and the strength in the labor market remains a critical support for consumer purchasing power as evidenced by the Mastercard SpendingPulse insights.[5]
It is expected that the blowout report will highlight the Federal Reserve's commitment to continuing to increase interest rates in order to reduce demand and control inflation.[6] This is a developing story, so please check back for updates.[7]
0. “US: Retail Sales rise by 3% in January vs. 1.8% expected” Forex Factory, 15 Feb. 2023, https://www.forexfactory.com/news/1205804-us-retail-sales-rise-by-3-in-january
1. “Retail sales surged in January, putting yet more pressure on the Fed” CNN, 15 Feb. 2023, https://www.cnn.com/2023/02/15/economy/retail-sales-january/index.html
2. “Retail Sales Grew By 8.8% In January: Report 02/10/2023” MediaPost Communications, 10 Feb. 2023, https://www.mediapost.com/publications/article/382443/retail-sales-grew-by-88-in-january-report.html
3. “Consumer Spending Shows Signs of a Rebound” Investopedia, 10 Feb. 2023, https://www.investopedia.com/consumer-spending-shows-signs-of-a-rebound-7108251
4. “US retail sales grow by more than expected in January” ShareCast, 15 Feb. 2023, https://www.sharecast.com/news/international-economic/us-retail-sales-grow-by-more-than-expected-in-january–12351462.html
5. “MasterCard data is another sign that the consumer remains healthy” ForexLive, 10 Feb. 2023, https://www.forexlive.com/news/mastercard-data-is-another-sign-that-the-consumer-remains-healthy-20230210
6. “Retail sales surged in January, putting yet more pressure on the Fed” erienewsnow.com, 15 Feb. 2023, https://www.erienewsnow.com/story/48387449/retail-sales-surged-in-january-putting-yet-more-pressure-on-the-fed
7. “Retail sales surge 3% in January despite stubbornly high inflation” Fox Business, 15 Feb. 2023, https://www.foxbusiness.com/economy/retail-sales-surge-january-stubbornly-high-inflation
