Better than expected economic data showed US retail sales rose significantly in January. Strong consumer spending and an increase in inflation were seen in January’s economic figures. If this trend continues, the Federal Reserve will have to continue tightening monetary policy for a longer period to slow the US economy.
The Census Bureau said on Wednesday that retail sales, which include purchases of food and fuel, increased by 3% in December compared to the previous month. Economists anticipated a 1.8% gain.
Leading the sales increases were restaurants, bars, and retailers of automobiles and auto parts.
After a month of sales decline of 1.1% in December, no categories experienced a decline.
Retail sales rose 6.4% on a yearly basis, perfectly matching the change in the consumer price index that was announced on Tuesday.
The data comes a day after the US Labor Department released inflation estimates that showed pricing pressures were not diminishing as much as they were late last year. The data showed hints that American consumers had not cut back spending on discretionary items despite rising inflation.
However, the reopening of China’s economy and Europe’s improving economic development could make inflation even more enduring.
According to data from the Commerce Department, retail sales exceeded forecasts last month, fueling concerns that strong consumption and a higher-than-anticipated reading on consumer prices on Tuesday may keep the Federal Reserve on an aggressive course.
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