US retail sales jump most in 10 months

Bloomberg

US retail sales rebounded by more than forecast with the biggest gain since March, as Americans kept spending through a Covid-19 spike and hot inflation to help drive the economic recovery.
The value of overall purchases rise 3.8% in January after a downwardly revised 2.5% drop in the prior month, Commerce Department figures showed.
The median estimate in a Bloomberg survey called for a 2% advance in overall retail sales from the prior month.
The broad-based advance in sales underscores the resiliency of Americans’ demand for merchandise. While the omicron variant and related surge in Covid-19 infections likely dampened services spending in the month, an improving labour market has helped consumers continue to spend on things like cars and furniture despite decades-high inflation and a collapse in confidence.
Eight of the 13 retail categories rose in the month. Sales at non-store retailers surged 14.5% after plummeting in December. Motor vehicle sales rose 5.7% following a decline in the prior month. Home furnishing stores also posted a solid sales advance.
Receipts at restaurants and bars, the report’s only services-oriented category, falls 0.9%, likely reflecting record surge in Covid-19 cases seen in January.
On top of Omicron and inflation, the expiration of monthly child tax credit payments — a program that gave millions of families up to $300 per child each month — may also weigh on consumer spending in the near-term.
Before the report, economists were projecting US economic growth to slow to a 1.7% annualised pace in the first quarter, a sharp deceleration from the 6.9% seen in the final three months of 2021.

Excluding motor vehicles, retail sales rose 3.3%, topping all expectations. So-called control group sales — which are used to calculate gross domestic product and exclude food services, auto dealers, building materials stores and gasoline stations — increased 4.8%, also the strongest since March.