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The numbers: Sales at U.S. retailers such as Amazon and Best Buy jumped 3.8% in January as Americans bought more cars, furniture, consumer electronics and other goods in a good sign for the economy.
The increase in sales was the largest since last March, when Americans spent a good chunk of their stimulus money from the government. Economists polled by The Wall Street Journal had forecast a 2.1% gain.
Households bought more goods in early 2022 after paring back in the final month of last year. Retail sales fell a revised 2.5% in December.
A rapid decline in omicron cases likely abetted the increase in spending.
Rapidly rising prices for gas, food, new cars and so forth played a part, but only a small one. Consumer prices rose 0.6% in January. The inflation-adjusted increase in spending was still quite large.
Retail sales are a big part of consumer spending and offer clues on the strength of the U.S. economy.
Big picture: Americans are generally in good financial health. Savings are high, wages and salaries are rising at the fastest pace in decades and most people feel secure in their jobs.
Yet high inflation threatens to sap their buying power, discourage them from making as many purchases and even endanger the economy.
The Federal Reserve is plotting to raise interest rates to choke off inflation, but the central bank has often choked off economic growth in doing so. The Fed has to perform a delicate high-wire act.
Market reaction: The Dow Jones Industrial Average
DJIA,
+1.22%
and S&P 500
SPX,
+1.58%
were set to open lower in Wednesday trades.
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