Retail Sales Rebounded in January, Rising 3.8%
U.S. retail sales climbed to $649.8 billion in January, rising 3.8 percent over December 2021 and signaling encouragement and optimism for retailers in the new year. The U.S. Census Bureau's new sales numbers, released Wednesday, show that January spending was much higher than the end of 2021. From November to December, sales decreased by 2.5 percent. Drug stores, clothing stores and general merchandise stores saw the biggest sales increases in January. Online purchases saw a 14.5 percent growth month-over-month.
"January sales overcame major headwinds that make the results all the more impressive,” National Retail Federation (NRF) Chief Economist Jack Kleinhenz said. “A triad of forces weighed on consumer behavior and spending as weather slammed a large portion of the United States, the Omicron variant was relentless, and inflation was escalating. On top of that, the enhanced child care tax credit ceased at the end of 2021, impacting millions of families. Despite all that, consumers ramped up spending even after a record-breaking holiday season.”
January’s results follow a 14.1 percent year-over-year increase in retail sales as calculated by NRF during the November-December 2021 holiday season. Both the rate of growth and the $886.7 billion spent during the holidays were new records despite the pandemic and other factors.
Total Retail's Take: Heading into 2022, retailers were dealing with the ongoing supply chain crisis, the persistent Omicron variant, labor shortages, rising inflation, among other challenges. Nationally, Americans expected inflation to go up and were divided over whether the economic growth would increase or decrease, according to a Gallup poll conducted last month. Wednesday's numbers show consumers are spending with confidence. Easing COVID-19 restrictions may further contribute to the economy's growth, particularly at brick-and-mortar stores. However, the government's child tax credit, which ended at the start of the year, may negatively impact consumers' spending going forward.
