"US retail sales rose in January by the most in nearly two years, signaling robust consumer demand that could bolster the Federal Reserve’s resolve to keep raising interest rates in the face of persistent inflation.
"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, Commerce Department data showed Wednesday. Excluding gasoline and autos, retail sales rose 2.6%, also the biggest increase in nearly two years. The figures aren’t adjusted for inflation.
"The total retail sales figure matched the highest estimate in a Bloomberg survey of economists, which had a median forecast of 2%.
"All 13 retail categories rose last month, led by motor vehicles, furniture and restaurants. The report showed vehicle sales climbed 5.9% in January, also the most in nearly two years. The value of sales at gasoline stations were essentially unchanged."
Bloomberg goes on to note that "the data follow a report Tuesday that showed US consumer prices rose briskly at the start of the year — including in many goods categories like clothing and household furnishings — prompting several Fed officials to suggest that interest rates may need to go even higher than expected to quash persistent inflationary pressures."
Jack Kleinhenz, chief economist at the National Retail Federation (NRF), released the following statement: “Consumer spending clearly picked up after the holidays. Sales were helped along by job and wage growth, slightly lower inflation and unusually warm and dry weather that preceded February’s record cold. A large cost-of-living adjustment gave Social Security beneficiaries more money to spend, and many consumers were still drawing on savings built up during the pandemic. January made up for the softer pattern of spending in December that came after early shopping pulled holiday spending forward this past fall.”