- Retail sales rose to 3.8% in January
- Core retail sales increased to 4.8%;
- December figures revised lower
US retail sales rebounded sharply in January as supply chain issues began to improve and the Omicron coronavirus variant began to wane, the Commerce Department said in its monthly report Wednesday. Retail sales jumped 3.8% mom in January, rebounding from an downwardly revised 2.5% drop in December, and well above analysts' estimates of a 2% rise. It is the biggest increase in retail sales in ten months during the time of rampant inflation. Online sales rose strongly in January to 14.5% after posting an 11.4% decline in the previous month. Home furnishing stores and department stores also recorded solid increases o 7.2% and 9.2%, respectively.
Meanwhile sales at gas stations declined 1.3% even as gas prices also fell by 0.8% in January, partially due to the omicron variant which forced many people to stay home and work remotely. For this reason restaurants saw a 0.9% decline as well. Excluding autos, retail sales were up 3.3% and excluding autos and gas 3.8%. Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services soared by 4.8% in January after plunging by 4.0% in December.
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US retail sales recorded the biggest gain since March. Source: Bloomberg via ZeroHedge
Core retail sales which figure is used to calculate GDP - jumped 4.8% MoM, rebounding from 3.1% MoM decline in the previous month. Source: Bloomberg via ZeroHedge
Today's report indicates some improvement in supply chain shortages that have plagued global industries for much of the past two years since the start of the COVID-19 pandemic. Nevertheless the US economy is facing the worst inflation in 40 years, which is to some extent also fueled by retail sales. For this reason the majority of economists expect the Fed to raise the federal funds rate multiple times this year. Therefore today's Minutes of the Federal Reserve's last policy meeting is likely to provide more details regarding the US central bank's plans.
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