Feb. 16 (UPI) — Retail sales in the United States last month surged by nearly 4% as supply chain issues began to improve and the Omicron coronavirus variant began to wane, the Commerce Department said in its monthly report Wednesday.
The department said that sales nationwide increased by 3.8% in January to $649.8 billion — well above the 2.1% growth predicted by most economists.
The January figure is a marked improvement over December, when sales actually saw a decline of 2.5%. In Wednesday’s assessment, the department said December spending was actually worse than the 1.9% slide that was initially reported.
The Commerce Department said in its report that retail and food services in January were up 13% year to year. Over that same period, sales at gasoline stations (33.4%) and clothing retailers (22%) also significantly increased.
Excluding auto sales, overall sales were up 3.3%. The department also noted that sales increased by 16% from November through January from the same period a year ago.
Many other retail sectors saw solid growth — including general merchandise, department stores, home furnishings and online sales — while the restaurant industry experienced a 0.9% decline from December.
Wednesday’s report reflects some improvement in supply chain shortages that have plagued global industries for much of the past two years since the start of the COVID-19 pandemic. The Omicron variant also began to ease in January, which experts believe accounts for some of the economic growth.
The Commerce Department said earlier this month that inflation in the United States rose by a steep 7.5% for the 12 months ending in January to the highest level in 40 years.
At its last policy meeting, the Federal Reserve decided to leave interest rates unchanged — but noted that it expects to raise them “soon.” Most experts expect the Fed to raise the federal funds rate multiple times before the end of 2022, due primarily to inflation.
