U.S. shoppers sharply increased spending in January, buoyed by stimulus payments that many households received in the most recent virus-relief package.
Retail sales, a measure of purchases at stores, at restaurants and online, rose by a seasonally adjusted 5.3% in January from a month earlier, the Commerce Department said Wednesday. The increase followed three months of decline during the holiday season. It was the strongest gain since last June, when the economy was in the process of reopening from pandemic-related closures.
“It’s hard not to see a message here that the stimulus worked in January to support a turnaround after a decline in early winter,” said Robert Rosener, senior U.S. economist at Morgan Stanley, referring to the $600-a-recipient stimulus checks distributed in early January.
The positive surprise from the retail sales report on consumer spending “firms up the growth trajectory” for the first quarter, he added.
Consumer spending is the main driver of the U.S. economy, accounting for more than two-thirds of economic output.