NEW YORK — Americans picked up the spending pace in January as the threat of omicron faded and there was some easing of supply shortages.
Retail sales surged a seasonally adjusted 3.8% last month, whizzing past the projections of most economists. That compared to the prior month when sales slid 2.5% according to revised figures released today by the U.S. Commerce Department.
Surging inflation likely pumped up the numbers further in January.
Sales at general merchandise stores rose 3.6% while department stores saw business up 9.2%. Online sales surged 14.5%
The omicron variant that emerged in late November caused widespread worker shortages with so many people calling out sick. Yet the wave of the most recent variant appears to have been short-lived and infections began to decline by mid-January as fast as they rose late last year. Cases have plunged from 436,000 a day two weeks ago to 136,000 Monday.
What is rising is inflation, reaching heights not seen in four decades to wipe out pay raises and potentially eliciting a more forceful response from Federal Reserve, which is expected to begin raising interest rates to cool the economy.