United States: Retail sales rebound robustly in January
Retail sales increased 3.8% in month-on-month seasonally-adjusted terms in January, which contrasted December’s 2.5% decrease. January’s rebound was primarily due to stronger purchases of food and beverages, and automobiles.
On an annual basis, retail sales rose 13.0% in January, which was down from December’s 16.7% expansion. Meanwhile, annual average retail sales growth rose to 19.7% in January (November: +19.4%). This signals an improving trend in the retail trade sector.
Commenting on the latest print with regards to the monetary policy outlook, Katherine Judge, senior economist at CIBC World Markets, noted:
“Another upside surprise has shown that the US economy is off to a stronger start than we thought in 2022. A 50bps hike at the Fed’s March meeting can’t be ruled out, but it’s not our call. […] It’s clear that the economy will require a faster path to getting the fed funds rate above 1% at this point, but that can readily be achieved by hiking 25 bps at each of the next four meetings.”