Retail sales increased in January as job and wage growth and easing inflation encouraged spending, but strong spending complicates Fed’s fight to tame inflation.
A 3% increase in sales with US retailers in January is the most significant increase in nearly two years. This number reflects the strength of the economy as the sales had been forecast to increase by 1.9%, according to a Wall Street Journal poll of economists.
Excluding sales of auto dealers and gasoline stations, the receipts increased 2.6%, which is still a strong number, which could increase pressure on the Federal Reserve to continue raising interest rates to tame inflation.
In an interview on CNBC, NRF President & CEO Matthew Shay said, “We have very resilient consumers. People are out there spending, and in spite of what they know, and they tell us about concerns regarding inflation, they’re still finding a way to get out there to spend.”