US Retail Sales Slump in January Amid Cold Weather, Inflation
Retail sales in the United States experienced a notable decline last month, attributed primarily to freezing temperatures that kept consumers indoors and hindered sales at car dealerships and various retail establishments.
According to the Commerce Department, retail sales decreased by 0.9% in January compared to the preceding month, after two consecutive months of solid growth. Pantheon Macroeconomics recorded January's average temperature as the lowest since 1988, significantly affecting the South, where extreme cold was uncommon.
The devastating fires in Los Angeles potentially contributed to the spending downturn. Sales at auto dealerships plummeted by 2.8%, while furniture stores, home and garden centers, and even the robust online retail sector witnessed a 1.9% decline.
Consumer confidence indices indicated a possible decline in consumer sentiment, which could have impacted spending patterns. Nonetheless, steady hiring and wage growth continue, suggesting economic expansion. Last week, the government reported a second consecutive monthly decline in the unemployment rate to a low of 4%.
However, inflation persisted in January, despite the Federal Reserve's aggressive interest rate hikes to curb its impact. Supermarket prices surged, driven by the soaring cost of eggs.