Retail Sales Jumped in January Despite Surging Inflation

February 16, 2022

Consumer spending rebounded in January, even as shoppers faced the fastest price increases in four decades.

Retail spending, which tracks spending at stores, online, and in restaurants, rose by a seasonally adjusted 3.8% in January from the previous month, according to the Commerce Department.

That marks the strongest monthly gain since last March, when Americans received stimulus checks, and a sharp rebound from December’s 2.5% decline, which was revised down from an initially reported 1.9% drop.

Sales at restaurants and bars, an important economic barometer for the pandemic-era economy, declined by just 0.9% for the month, despite surging Covid numbers.

Unlike other economic reports released by the U.S. government, retail sales are not adjusted for inflation, meaning that higher retail sales may reflect higher prices rather than more purchases.

Economists estimate that about one-third of the increase in retail sales in 2021 was due to inflation, and that share is expected to rise in 2022. 


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