Online retailers saw the biggest gains, with sales popping 14.5 percent, while furniture revenue jumped 7.2 percent and automotive sales climbed 5.7 percent. Meanwhile, gasoline sales dropped 1.3 percent, and sales at bars and restaurants declined 0.9 percent.
Analysts say the data shows how rising prices are affecting consumers. In the past, a big increase in retail sales might have been interpreted as a positive sign that Americans are buying more. But the new data comes as inflation hovers near a 40-year high, reaching an annual rate of 7.5 percent last month.
That has left consumers with higher food, housing, energy, transportation and other expenses. Used-vehicle prices have soared about 40 percent in the past year, for example, as the industry contends with supply chain disruptions and a car shortage. Still, that hasn’t stopped people from spending.
“While sentiment surveys show consumers are really unhappy about inflation, they aren’t so upset about it to stop spending — consumer spending continues to propel the recovery,” said Bill Adams, chief economist for Comerica Bank.
Matthew Sherwood, global economist with the Economist Intelligence Unit, said the data shows how U.S. consumers have borne the brunt of inflationary pressures and supply chain problems.
“A significant factor in January’s strong performance is that retailers have been more readily able to pass on higher costs to their customers, particularly in terms of motor vehicles, home furnishings, home improvement and clothing,” Sherwood said.
“It is no surprise then that U.S. consumers are in a grumpy mood.”
Taken over the past year, retail sales increased roughly 13 percent. Sales at gas stations jumped by about a third in the one-year period leading up to January, while sales at restaurants and bars jumped by about 25 percent.
White House press secretary Jen Psaki said the pace of sales growth reflects the resilience of the economy. “Compared to this time last year, sales at grocery stores, restaurants and clothing stores, among others, increased, underscoring the strength of the American economy as we recovered from the pandemic,” Psaki said.
Bankrate senior analyst Ted Rossman said there are still “underlying weaknesses” in the Commerce Department’s report. He noted that seasonal adjustments to previous reports are playing a bigger role than they have in the past.
“A more apt apples-to-apples comparison is to look back at January 2022 vs. January 2021,” Rossman said in an email. “While the 13% year-over-year gain is respectable, it’s actually the lowest year-over-year increase in 11 months. Looking through that lens, January 2022 sales weren’t as good as they initially appear, and December 2021 sales weren’t as bad.”