Retail sales rose by 3.8% in January, which was double that of the forecast. Retail sales were previously decreasing and decreased by 2.5% in December. The decline is estimated to be caused by consumers buying early Christmas presents in fear the products will be out of stock. There was a 33.4% yearly increase in gasoline sales and a 27% increase in sales at restaurants and other food and drink establishments. This could have been a driving factor in the 4.4% increase in overall retail sales. Another factor could have been due to inflation since retail sales are only adjusted for seasonality and not changes in price.
In January, consumer prices rose at an annual rate of 7.5%, and wages have also been rising at an annual rate of 4.7%. An increase in wage and the economy re-opening has led to consumers spending more money. Marwan Forzley, the CEO of Veem, has optimistic hopes for sales in the new year. The market interest rates are higher and have a yield of about 2% on the 10-year Treasury. The Fed is predicted to be more aggressive in the first half of the year in order to moderate inflation.
It is good to see that retail sales are rising and that they are increasing more than predicted. This indicates that people have enough income to spend on retail goods and an increase in consumption, both of which are good. It also means that retail businesses sales are going well which is good.
ReplyDeleteWith the current global situation surrounding Russian invasion of Ukraine, we might expect the retail sales to fall in February and March.
ReplyDeleteIt is interesting that retail sales rose so much more than expected for the month of January. With the very high inflation we are currently experiencing and the current global situation in Ukraine, I wonder if sales will continue to increase in the next few months, or fall. I think if consumers start to become more wary of spending a lot of money on things they might not truly need, retail sales may begin to drop again.
ReplyDeleteI wonder what proportion of this increase is fueled by an actual increase in employment (and subsequently, disposable income), and a last push by consumers to reap the benefits of low interest rates before the Fed increases this year.
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