Although retail sales in the US rebounded in January, marking the strongest increase since early 2021, as policymakers are closely watching for signs of consumer demand. use cooling.
In the last year, US Federal Reserve Bank (Fed) has continuously made interest rate hikes to curb persistent inflation.
Although there are signs that this policy is effective in all areas, including spending and consumingbut this latest data raises concerns that the rate hike cycle isn’t over yet.
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According to the report of US Department of Commerceafter two consecutive months of decline, retail sales in January rose 3% to $697 billion.
This number exceeded economists’ forecasts and was the strongest sales increase since early 2021. Compared to a year ago, US sales increased 6.4%.
During the period from December 2022 to January 2023, auto sales increased by 6.4%, making the largest contribution to the overall retail sales boost.
Sales at department stores also surged, at 17.5 percent, while restaurant and bar sales rose 7.2 percent.
Immediately after the report was published, Wall Street stocks recorded a decline as the investment market worried that the Fed might step up efforts to fight back. inflationary.
Fed officials are now monitoring consumer trends to determine whether further rate hikes are needed.
However, the latest data shows that it is likely that the agency will not ease monetary policy.
On the same day, the Fed released a separate report showing industrial production was flat in January, after contracting in the previous two months.
Experts say retail sales, as well as industrial output, may be temporary.
Pantheon Macroeconomics expert Kieran Clancy said recent favorable conditions, such as mild weather, may have boosted consumer sentiment, which in turn supported retail sales and industrial output.
However, expert Clancy said that this trend is difficult to sustain for long. According to him, looking at the “big picture” can see that the industrial production trend has decreased significantly since mid-2022, because the measure of increasing interest rates made businesses not dare to invest heavily.
Rubeela Farooqi, chief US economist at High Frequency Economics, also said higher borrowing costs and rising prices were a drag on consumers.
A strong labor market and easing inflation should support household spending in the coming months, she said.
Experts also believe that the salary factor can also affect consumer sentiment.
Oren Klachkin, chief US economist at Oxford Economics, said the propensity of US households to save has increased during the pandemic, but there are many signs that they are no longer so rich amid the pandemic. Inflationary scenario, whereby consumption levels may fall in the near future.
Hoang Chau (VNA/Vietnam+)