Fueled by pay gains, solid hiring, and enhanced savings, Americans sharply ramped up their spending at retail stores last month in a sign that many Consumers remain unfazed by rising inflation. Retail sales jumped 3.8% from December to January; the Commerce Department said Wednesday, a much more significant increase than economists had expected.
Though inflation helped boost that figure, most of January’s gain reflected more purchases, not higher prices. Last month’s increase was the largest since last March when most households received a final federal stimulus check of $1,400.The fact that Consumers spending remains brisk even after government stimulus has faded. That enhanced unemployment that aid ended in September suggests that Americans’ pay is rising enough to drive a healthy pace of spending and economic growth.
The omicron variant that emerged in late November caused widespread worker shortages, with many employees calling in sick. Yet the wave of the most recent variant appears to have been short-lived. Reported infections began to decline by mid-January as fast as they rose late last year. Cases have plunged from 436,000 a day two weeks ago to 136,000 Monday.