Great News! Retail Sales In January Were Surprisingly Strong
After three consecutive months of declines, U.S. retail sales spiked 5.3% in January, effectively stemming a backslide in consumer spending that economists worried might turn into a sinking ship, dragging the entire U.S. economy down with it.
Didn’t happen! Phew. The U.S. Census Bureau reported this morning that retail sales for the month totaled $568.2 billion, an increase of 5.3% from December 2020, and a 7.4% increase from January 2020. The spike follows a lackluster holiday retail season: November 2020 to December 2020 retail sales were down 1% from the previous year.
Economists expected an upswing in retail sales in 2021, but forecast a modest 1.2% in January.
The $600 COVID-19 stimulus checks that went out to millions of American adults in December surely played a role in spending. Declining COVID-19 infections across the nation likely played a role, too.
Online sales continued to drive overall retail spending. Online and other non-store sales were up 11% from December 2020, and up a whopping 22.1% compared to January 2020.
“January’s retail sales numbers reflect a very strong start for consumers and retailers as we look ahead to a critical year curbing the global pandemic and strengthening our economic recovery,” said National Retail Federation (NRF) president and CEO Matthew Shay in a statement this morning. “Consumers and the economy as a whole remain in good shape despite unprecedented adversity over the past year, and congressional action has been a lifeline for households and businesses disproportionately impacted by the pandemic.”
Shay adds that widespread vaccination is the key to keeping the spending trend going. The NRF pushed the CDC to put retail workers in the top vaccination groups (an effort that didn’t pan out), and has been urging the Biden administration to work with the nation’s major retailers “to get the vaccine into communities and administered as quickly and as safely as possible,” Shay said.
What did consumers buy? Some specifics:
• Sporting goods, hobby, musical instrument, and book stores were up an astonishing 22.5% in January, compared to January 2020.
• Clothing and clothing accessory stores (a category that includes jewelry stores) were up 5% month over month in January, but down 11.3% year over year—a statistic largely due to sagging apparel sales, data indicates.
• Compared to December 2020, sporting goods stores were up 8%, building materials and garden supply stores were up 4.6%, and grocery and beverage stores were up 2.4%.
• Furniture and home furnishings stores are still doing well in the pandemic—they were up 12% from last month.
• Compared to December 2020, general merchandise stores were up 5.5%, and electronic and appliance stores were up 14.7%.