Retail sales rose 3.8% in January, the Commerce Department reported Wednesday, a faster-than-expected rebound from a sharp decline in December, according to The New York Times.
The purchasing was broad-based: Sales at car dealers rose 5.7% over the previous month, while e-commerce sales rose 14.5%. Spending at electronics and appliances stores rose 1.9%, and sales at clothing and general merchandise stores, such as department stores, were higher as well.
The effect of the latest coronavirus wave was evident in some sectors. Spending at restaurants, bars and gas stations fell about 1% as people stayed home. But overall, sales in January rose far faster than the 2% gain economists had expected.
Consumers were spending even as they faced fast-rising prices and short supplies of new cars, appliances and much more. Consumer prices in January increased 0.6% from the prior month, the government said last week, and 7.5% from 12 months earlier. Supply chain woes coupled with strong consumer demand pushed prices higher through all of last year.
Although consumers haven’t been deterred by inflation yet, there have been signs it is beginning to wear them down. One measure of consumer sentiment released this month — the University of Michigan’s Index of Consumer Sentiment — showed the least favorable long-term economic outlook in a decade.
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