January retail sales are strong to start 2023

Retail sales began 2022 on solid footing, according to data respectively issued today by the United States Department of Commerce’s U.S. Census Bureau and the National Retail Federation (NRF).

Commerce reported that January retail sales—at $697.0 billion—were up 3% compared to January and up 6.4% annually. From November 2022 through January, total retail sales were up 6.1% compared to the same period a year ago.

January retail trade sales rose 2.3%, from December to January, and were up 3.9% annually. Food services and drinking places saw a 25.2% annual gain, with general merchandise stores up 4.5%. Nonstore retailers, which includes e-commerce, saw a 5.7% annual gain.

NRF reported that its calculation of retail sales, which excludes automobile dealers, gasoline stations, and restaurants to focus on core retail, saw January increase 1.5% compared to December and a 4.8% increase on an unadjusted basis annually. This followed a 0.5% decrease, from November to December and a 4.8% annual increase in December. NRF also noted that its retail sales numbers saw a 5% unadjusted annual increase on a three-month moving average through the month of January.

“Consumer spending clearly picked up after the holidays,” NRF Chief Economist Jack Kleinhenz said in a statement. “Sales were helped along by job and wage growth, slightly lower inflation and unusually warm and dry weather that preceded February’s record cold. A large cost-of-living adjustment gave Social Security beneficiaries more money to spend, and many consumers were still drawing on savings built up during the pandemic. January made up for the softer pattern of spending in December that came after early shopping pulled holiday spending forward this past fall.”

NRF said January retail sales saw gains in nearly all of the categories it tracks, including:

-Sporting goods stores were up 0.2% month over month seasonally adjusted and up 6.9% unadjusted year over year;
-Clothing and clothing accessory stores were up 2.5% month over month seasonally adjusted and up 6.6% unadjusted year over year;
-Online and other non-store sales were up 1.3% month over month seasonally adjusted and up 5.7% unadjusted year over year;
-Grocery and beverage stores were up 0.1% month over month seasonally adjusted and up 5.3% unadjusted year over year;
-Health and personal care stores were up 1.9% month over month seasonally adjusted and up 4.9% unadjusted year over year;
-Furniture and home furnishings stores were up 4.4% month over month seasonally adjusted and up 4.5% unadjusted year over year;
-General merchandise stores were up 3.2% month over month seasonally adjusted and up 3.4% unadjusted year over year;
-Building materials and garden supply stores were up 0.3% month over month seasonally adjusted and up 3.4% unadjusted year over year; and
-Electronics and appliance stores were up 3.5% month over month seasonally adjusted but down 6.5% unadjusted year over year

“Retail has started the new year on a positive note, with a solid increase in total sales,”: wrote Neil Saunders, Managing Director of GlobalData, in a research note.“Retailers will see this as a win as it is clear that, despite a modest slowdown in growth compared to most of last year, there has been no significant erosion in consumer spending power. That said, the annual rate of growth—which is running at 6.4% – is only modestly above the inflation rate for retail, which means volume growth is much thinner and, in some categories, is negative.”

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