Business

US retail sales propelled higher as consumers spent stimulus cheques

US retail sales jumped by the most in seven months in January, boosted by a second round of stimulus cheques and relaxed curbs on businesses as a resurgence of coronavirus cases slowed.

Sales were up a seasonally adjusted 5.3 per cent against the previous month, the US Census Bureau said on Wednesday. It was the first monthly increase in retail sales in four months, coming on the heels of a 1 per cent drop in December that signalled weaker spending during the holiday season. The figure also surged past economists’ expectations, beating a forecast of 1.1 per cent growth.

On an annual basis, retail sales grew 7.4 per cent versus January 2020.

The turnround in retail sales came as Americans received cheques of up to $600, one of the measures included in a stimulus bill signed by Donald Trump at the end of last year.

President Joe Biden has proposed sending a fresh round of direct payments as part of a $1.9tn package. However, the proposal has faced resistance from Republicans wary of passing another huge bill.

The latest retail data indicated that demand was strong across categories including cars, electronics, grocery stores, building materials and home goods such as furniture. Sales at non-store retailers, which includes ecommerce, climbed 11 per cent as consumers continued to favour online shopping over visits to brick-and-mortar outlets during the pandemic.

Food services such as restaurants and bars — one of the sectors hit hardest by the pandemic and coronavirus-related restrictions — rose 6.9 per cent.

Data on Wednesday also showed a 1.3 per cent increase in the prices that businesses receive for their goods and services, the biggest gain since the US labour department launched the index in 2009 and a further sign of strengthening demand.

The jump in the producer price index reflected higher petrol prices, as well as gains in portfolio management, outpatient care, guest room rentals and apparel.


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