U.S. retail sales soared higher last month, data from the Commerce Department indicated Wednesday, thanks in part to car and auto component demand, while inflation pressures lifted the dollar amount of the overall total.
January retail sales rose 3.8% from the previous month to a collective $649.8 billion, the Commerce Department said, the biggest gain in nearly a year that crushed the Street consensus forecast of a 1.8% gain. The December total was revised downward to a decline of 2.5%, the Commerce Department report showed, from the original estimate of a 1.9% slide.
Stripping out the auto sector, January retail sales were up 3.3%, the Commerce Department report noted, while stand-alone sales of cars and car parts rose 5.7%.
"The strong, broad-based rebound in retail sales after the weak December is particularly impressive given the drag from the Omicron variant and serves as a reminder that the U.S. consumer doesn’t stay down for long," said Jeff Buchbinder, Equity Strategist for LPL Financial. "Perhaps economic growth expectations for the first quarter have gotten overly pessimistic."
"It looks like weak surveys of consumer sentiment were a head fake," he added. "Watch what consumers do, not what they say. Rising wages are supporting spending despite high inflation."
U.S. stock futures moved lower following the data release, with futures tied to the Dow Jones Industrial Average indicating a 125 point decline slide and the S&P 500 priced for a 12 point pullback.
Benchmark 10-year Treasury note yields eased to 2.02% following the data release while the dollar index was marked 0.1% lower on the session at 95.874 against a basket of six global currencies.
U.S. inflation accelerated to the fastest pace in four decades last month, data from the Bureau of Labor Statistics indicated earlier this month, with underlying figures showing no signs of near-term relief for pinched American consumers.
The headline consumer price index for the month of January was estimated to have risen 7.5% from last year, up from the 7% pace in December and the fastest rate since June of 1982, powered largely by airfares and rental costs. On a monthly basis, inflation was up 0.6%, the BLS said, with both tallies topping Wall Street forecasts.
