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U.S. Retail Sales Surge in January Despite Inflationary Pressure


U.S. retail sales surged in January, posting the biggest monthly gain in nearly two years.[0] According to new numbers from the Commerce Department, seasonally adjusted retail sales rose 3.0% on a monthly basis to $697 billion, rebounding from a decline of 1.1% in December.[1] It was anticipated by economists that the number would increase by 1.8%.[2]

Retail sales rose 6.4% compared to the previous year, precisely corresponding to the consumer price index change reported on Tuesday.[3] The report stated that, apart from automobiles, sales increased by 2.3%, not taking inflation into account.[3] An estimate of a 0.9% increase was projected for the ex[3]

In May 2021, expenditure at pubs and eateries rose by 7.2%, the highest monthly surge since March 2021, while automobile sales grew by 5.9%.[4] Retail sales in January, not adjusted for seasonality, increased by 6.7% compared to the same month of the previous year, following a 5.1% jump in December.[4]

In January, the consumer-price index rose 6.4% as compared to the same period in the previous year, a slight decrease from December’s 6.5%, but still far exceeding the Federal Reserve’s 2% inflation goal.[1] In an attempt to stifle economic growth and reduce inflation, the Federal Reserve has been increasing interest rates.[5] Investors are worried that if interest rates go too high, it could lead to a recession in the U.S., and are hoping the Federal Reserve will not increase rates in 2019.[5]

It is currently anticipated that the Federal Reserve will raise interest rates by a quarter of a percent at their next two meetings, and then pause to evaluate the effects that their monetary policy choices have on inflation, employment, and the state of the economy overall.[3]

The confidence in the economy has not been reflected in increased spending by Americans.[6] Due to necessity, they have increased their expenditures.[6] This is an unplanned spending spree.[6] American consumers are spending lavishly in an attempt to keep up with rising prices.[6] They are not obtaining additional items.[6] They are spending more money for the same items they had previously, and in some cases, even fewer items.[6]

Overall, the retail sales report suggests that consumer spending was strong last month despite rising inflation.[4] Combined with Tuesday’s inflation data, it appears that American consumers are persevering in the face of macroeconomic pressures.

0. “Retail sales jumped by 3% in January, the biggest gain in nearly two years” CNN, 15 Feb. 2023,

1. “U.S. Retail Sales Rose Sharply in January” msnNOW, 15 Feb. 2023,

2. “U.S. retail sales climb by 3.0% in January By”, 15 Feb. 2023,

3. “Retail sales jump 3% in January, smashing expectations despite inflation increase” CNBC, 15 Feb. 2023,

4. “Stock Market Today: Stocks Close Up After Strong Retail Sales Data” Kiplinger’s Personal Finance, 15 Feb. 2023,

5. “Treasury yields rise as investors digest latest retail sales, inflation data” CNBC, 15 Feb. 2023,

6. “The Dark Side of January’s Big Retail Sales Print” SchiffGold, 16 Feb. 2023,

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