US Retail Sales Surge by 3.0% in January
US retail sales surged in January, according to the latest data from the U.S. Commerce Department.[0] The value of overall retail purchases increased 3% in a broad advance — the most since March 2021 — after a 1.1% drop in the prior month. Retail sales, apart from gasoline and autos, experienced the largest increase in almost two years at 2.6%. The figures have not been adjusted for inflation.[1]
Economists expected an increase of 1.8% in last month’s headline number, but instead, retail sales beat expectations, rising 3% in January.[0] The Census Bureau reported that retail sales increased by 3% in January, which reversed the consecutive drops recorded in November and December. In every area of expenditure monitored by the government, consumers spent more than before – with the exception of gas stations, where sales were the same.[2]
Retail sales surged 3% month-to-month to a total of $697 billion, exceeding the anticipated 1.7% increase according to FactSet. Sales increased by 2.6%, surpassing the prediction of a 0.45% rise, when taking into consideration the exclusion of vehicles and gas, which are two of the most unpredictable expenses. Excluding vehicle sales, core sales still exceeded expectations, increasing by 2.3% in comparison with the anticipated increase of 0.8% during the last month.[3] The control group in the report, excluding autos, gas, building materials, and food services, showed an increase of 1.7%, higher than the predicted 0.8%.[0]
The consumer price index, which tracks price changes for a range of goods and services, came in higher than expected and showed that inflation rose by 0.5% in January.[4] A year ago, the CPI had increased by 6.4%.[5] These figures will be taken into account by the Federal Reserve as it looks to continue its war against inflation.[6]
The most recent inflation data indicated that prices are staying at a high, troublesome level in the US, and the January US Employment Report was significantly better than anticipated, creating 517k jobs when the forecast was only 185k.[6] Signs of an improving US economy such as a robust labor market, increased retail sales, and strengthened manufacturing have given the Federal Reserve more flexibility in keeping interest rates higher for a longer duration if necessary.[6]
0. “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
1. “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
2. “Retail sales blowout underscores 2023’s unlikely boom” Axios, 15 Feb. 2023, https://www.axios.com/2023/02/15/the-2023-economic-boom
3. “US Retail Sales Jump 3% In January As Inflation Continues To Fall: What Investors Need To Know – SPDR S&P” Benzinga, 15 Feb. 2023, https://www.benzinga.com/news/23/02/30923643/us-retail-sales-climbed-3-in-january-as-inflation-continues-to-fall-what-investors-need-to-know
4. “Dollar advances to six-week peak after strong U.S. retail sales data” CNBC, 15 Feb. 2023, https://www.cnbc.com/2023/02/15/dollar-finds-friends-after-sticky-us-inflation-readout.html
5. “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
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