Retail sales in the U.S. increased three percent in January, blowing past even the most optimistic forecasts.
The Department of Commerce said Americans spent $697.0 billion at retail stores and online, 6.4 percent above January 2022. The sales figures are not adjusted for inflation but the month-to-month figures are seasonally adjusted.
The Department of Labor said this week that consumer prices were up 6.4 percent over the last 12 months. In January, the consumer price index rose 0.5 percent compared with December, which means that the increase in sales outpaced inflation.
Economists had forecast sales would grow 1.7 percent.
Bars and restaurants saw a 7.2 percent gain in the month. Sales are 25.2 percent above where they were a year ago. In December, restaurant and bar sales were flat compared with November.
Sales at auto dealers rose 6.4 percent from a month ago and are up 2.5 percent from a year ago.
Excluding autos, sales rose 2.3 percent compared with the previous month and are up 7.3 percent from a year ago. Economists had expected this figure would rise 0.9 percent. Excluding both autos and gas, sales increased 2.6 percent for the month and are up 7.4 percent from a year ago.
January saw a broad-based jump in consumer spending, with none of the categories of businesses tracked by the Commerce Department seeing a decline. Furniture store sales rose 4.4 percent for the month. Sales at electronics and appliance stores were up 3.5 percent. Building materials and garden center sales were up 0.3 percent. Grocery store sales rose 0.1 percent. Health and personal care store sales rose 1.9 percent.
Clothing store sales jumped 2.5 percent. Sporting goods and bookstores saw a 0.2 percent rise.
Department store sales rose 17.5 percent and sales at general merchandise stores rose 3.2 percent.
Online retailers saw a 1.3 percent sales increase.
Sales at gas stations were flat despite a 2.9 percent increase in gas prices during the month.
Sales in December disappointed, falling 1.1 percent, partly reflecting changing holiday shopping habits that have seen Americans buying more earlier in the year.
In a note to clients on Monday, Bank of America said that payments per household by its debit- and credit-card customers rose 5.1 percent in January compared with the year before, up from a 2.2 percent increase in December. Compared with the previous month, card spending is up 1.7 percent, the bank said.
The strength of the U.S. consumer may complicate the efforts by the Federal Reserve to tame inflation with higher interest rates. While the housing market has stalled and manufacturing appears to be contracting, the labor market and consumer spending remains strong. Last month, the economy added more than half a million jobs, unemployment fell to 3.4 percent, and employers started the month with 11 million job vacancies.
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