Retail Sales increased by 3.8% in January, well above the 2.1% Dow Jones estimate and depicting a consumer spending comeback. According to the Commerce Department on Wednesday, the numbers are not adjusted for inflation.
Retail Sales Surge
As reported by CNBC, the rising inflation did little to dent consumer spending in January as retail sales soared by 3.8%, beating expectations for the month. Furniture and online shopping were the main drivers behind the surge, while gasoline and sporting goods went the opposite direction.
“The numbers are not adjusted for inflation, so the 7.5% rise in the consumer price index for the month helped push a reversal from the 2.5% decline in December, which was revised lower from the initially reported 1.9% drop,” CNBC informs.
In December, retail sales had declined by 2.5% as the recovery is a positive sign and underlines a post-holiday surge.
Online shopping had a stellar month as nonstore retailers saw a gain of 14.5%, while furniture and home decor sales grew by 7.2%.
PNC’s chief economist, Gus Faucher, said: “Consumers say they are worried about inflation, but they continue to spend. Even taking into account the December decline, retail sales in recent months have been increasing much faster than prices, so households are purchasing larger volumes of goods and services, not just paying higher prices.”
Despite the surge of the Omicron variant, food and drink sales decreased by merely 0.9% during January.
Overall, year-on-year, retail sales grew by 13% amid a whopping 38% increase in gasoline station sales while clothing also jumped 21.9%. The worst inflation in 40 years has been a key element in the same period as it has pushed retail sales numbers.
Matthew Shay, president of the National Retail Association (NRA) said, “While the year ahead has challenges with inflationary pressures, labor shortages, COVID-19 impacts and uncertainty related to international tensions in Russia and China, today’s numbers show that despite these concerns, consumers are spending and the economy remains in good shape.”