Retail sales rose 3.8 percent in January, according to data released Wednesday by the Census Bureau, far higher than economists had expected.
Retailers and restaurants made a seasonally adjusted total of $649.8 billion in sales last month, up from a revised total of $626.3 billion in December. Economists expected retail sales to rise 2.1 percent in January after falling 2.5 percent in the final month of 2021.
“US consumers have obviously shrugged off concerns about empty shelves and surging coronavirus cases, as revealed by today’s exceptionally strong retail sales figures,” wrote Matthew Sherwood, global economist at the Economist Intelligence Unit, in a Wednesday analysis.
“As in the case of the recent jobs numbers, the Omicron variant of covid-19 has barely registered an impact, at least in terms of employment and retail spending,” he continued.
Economists had expected the record-breaking surge of COVID-19 cases driven by the omicron variant to wipe out January job growth and weigh heavily on retail sales. But consumers powered through the resurgent pandemic and high inflation, even as consumer prices rose 0.6 percent in January, according to Labor Department data released last week.
Sales by nonstore retailers, including major online shopping websites, soared 14.5 percent higher in January, leading all other categories. Department store sales jumped 9.2 percent, furniture and home goods stores saw sales rise 7.2 percent, and auto dealers and parts stores saw a 5.7 percent increase in sales.
Nearly every corner of the retail industry saw sales pop as Americans pulled back on certain activities with cases on the rise. Electronics stores, building material and garden stores, and clothing stores all reeled in more from consumers in January.
Even so, a pandemic-driven decline in dining and drinking out pushed sales by restaurants and bars 0.9 percent lower in January. Health and personal care stores also saw sales decline by 0.7 percent, and a drop in oil prices likely contributed to a 1.3 decline in gas station sales.
Retail sales figures are not adjusted for inflation, so the increase in sales considers the impact of higher prices.