Retail sales jumped in January

Prices were rising rapidly, products were scarce, and the omicron variant chilled the country at the start of the year. All the while, American consumers have continued to spend.

Retail sales rose 3.8% in January from the previous month, the Commerce Department reported on Wednesday, a faster-than-expected rebound after a sharp drop in December and another sign of the economy’s resilience. even though stores have shortened their opening hours or closed due to an outbreak of COVID-19 infections have led to widespread staff shortages. Wednesday’s sales data echoed a report that showed hiring was stronger than expected last month, with employers adding 467,000 jobs.

Other factors were also at play, including rapidly rising prices. Retail sales data has not been adjusted for inflation, and that could continue to boost sales numbers for months to come, economists said. But the overall result was still that consumer spending held up last month.

Consumer spending accounts for the bulk of economic activity in the United States, and the report came at a critical time for the economy as the Federal Reserve focuses on fighting inflation rather than supporting it. of growth. The central bank is expected to raise interest rates as early as next month, and rising borrowing costs could dampen consumer and business spending.

Some of January’s sales surge was likely due to one-time factors like a restocking of shelves that emptied last year, said Beth Ann Bovino, chief U.S. economist at S&P Global. With more products available for purchase, spending has increased, she said.