US retail sales surged in January by the most in almost 2 years, soaring 3% from December, according to the Commerce Department.
Economists had anticipated sales would rise by 1.8%, after the 1.1% decline in December when consumers pulled back on spending amidInstead the figures easily topped forecasts, making January the largest monthly sales bump since March 2021 when a third round of stimulus checks were cut.
"Some of that strength was due to people coming back and buying things on discount, some of that strength was due to the fact we had an 8.7% increase in Social Security payments, which gave more cash to 66 million ," Diane Swonk, KPMG's chief economist, told CNN this week. January's blowout report is likely to underscore the Federal Reserve's resolve to keep raising interest rates to cool demand as it tries to rein in inflation, economists say.
In addition to drawing down extra savings during the pandemic, consumers have been helped by an easing in inflation and lower fuel prices, Mike Skordeles, head of U.S. economics at Truist Advisory Services, said in an interview with CNN.
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