US retail sales surged 5.3% in January

[WASHINGTON] US retail sales surged in January by the most in seven months, suggesting fresh stimulus checks helped spur a rebound in household demand following a weak fourth quarter.

The value of overall sales increased 5.3 per cent from the previous month after a 1per cent decline in December, Commerce Department figures showed on Wednesday. All major categories showed sharp advances.

Ahead of the report, the median estimate in a Bloomberg survey of economists called for a 1.1 per cent monthly gain in retail sales.

A surge in Covid-19 cases curbed spending at year-end, but since then, virus cases have ebbed and states have started to ease some restrictions on businesses and activity. The ability to shop and eat out, paired with the latest round of US$600 stimulus payments, helped drive spending in the month across a variety of categories.

The jump in retail sales, which beat all estimates in Bloomberg's survey, could further embolden Republican opposition to President Joe Biden's US$1.9 trillion stimulus plan, which many in the GOP say is too big. Even so, Democrats are on track to narrowly pass the package without Republican votes, and the data could also be held up as evidence of how critical relief payments are to the economy and jobs.

Nonstore retailers, which includes online stores, rose 11 per cent, the most in two years. Food services and drinking places rose 6.9 per cent as restrictions eased at restaurants and bars across the country. Furniture stores, and electronics and appliance merchants also saw double-digit gains in the month.

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The so-called "control group" subset of sales, which excludes food services, car dealers, building-materials stores and gasoline stations, rose 6 per cent, the largest gain since June.

Gas station receipts rose 4 per cent, which at least in part reflected higher fuel prices. The retail figures aren't adjusted for price changes, so sales could reflect changes in gasoline costs, sales - or both. At the end of January, the average nationwide price for a gallon of gasoline was US$2.42 - roughly in line with pre-pandemic prices.

BLOOMBERG