US retail sales grew by 3.8% in January, the Commerce Department said on Wednesday as it issued the figure that is almost double than the economists' forecasts
WASHINGTON (Pakistan Point News / Sputnik - 16th February, 2022) US retail sales grew by 3.8% in January, the Commerce Department said on Wednesday as it issued the figure that is almost double than the economists' forecasts.
"Advance estimates of US retail and food services sales for January 2022, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $649.8 billion, an increase of 3.8 percent from the previous month," the Commerce Department said in a statement.
Year-on-year growth was at a slower pace though, expanding by 12.96% in the 12 months to January versus the 16.95% in the year to January of 2021. While the annualized sales for January last year was a blowout, it was not too surprising either given that it marked the early boom in an economy emerging from COVID-19-mandated lockdowns.
For last month alone, economists polled by US media had expected sales to grow by 2% on the average due to soaring inflation eating into sales. Thus, the month-on-month growth of 3.8% reported by the Commerce Department surprised those expecting a more subdued figure after the 1.9% drop in December sales.
"December retail sales tend to miss the secular trends toward early holiday shopping" which usually begin in late October or early November, economist Greg Michalowski said.
"This month's rebound is certainly impressive," Michalowski said, adding that renewed concerns in January about the coronavirus Omicron variant, supply constraints for goods and soaring prices as manufacturers passed on the higher costs of doing business almost two years into the pandemic.
The US economy grew by 5.7 percent in 2021, the fastest since 1984, from a 3.5% contraction in 2020 caused by the pandemic. But inflation grew even faster, with the Consumer Price Index expanding 7.5%, its most since 1982.
A breakdown of January's sales showed the automobiles sector having one of the highest growth with a monthly jump of 5.7% after the slide of 1.6% in December. Sales of building materials surged 4.1% as demand for homes remained red-hot. Electronics and appliance store sales rose by 1.9% while those at food and beverage stores grew by 1.1%.
Declines were seen at stores for books, sporting goods, hobbies and musical instruments, which registered a drop of 3%, suggesting that inflation was still influencing some consumers to cut back on discretionary spending. Gasoline prices at seven-year highs also led to a 1.3% drop in sales at fuel pumps. Restaurants and bars saw an overall decline of 0.9% as the pandemic measures continued to limit dining out.
