Feb. 15 (UPI) -- Consumers in the U.S. economy, the world's largest, seem unfazed by stubbornly-high inflation with data released Wednesday showing retail sales in January surprised on the upside.
Data from the U.S. Census Bureau show retail and food services sales in January totaled $697 billion, a 3% increase from the previous month, beating the market forecast of a 1.8% increase.
Retail sales in January were 6.4% higher than the same month in 2022 and data from November through January, which includes the holiday sales period, show a 6.1% increase.
More people dined out in January, with sales on food services and at drinking places leading to most of the increase in retail sales at 25.2% from January 2022, while sales for general merchandise showed a 4.5% increase from last year.
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The Labor Department on Tuesday reported that inflation increased in January, with housing and energy prices leading the way.
The cost for shelter accounted for half of the increase in consumer prices, jumping 7.9% from year-ago levels. Energy costs, meanwhile, increased 8.7%, while grocery bills are up 10.1% from last year.
Even still, White House press secretary Karine Jean-Pierre said that U.S. President Joe Biden's "economic plan is indeed working and it's giving people a little breathing room." That, however, is in contrast to recent statements from Federal Reserve Chairman Jerome Powell, who offered a less-than-promising outlook on future economic trajectory.
"It's going to be bumpy," he said during an appearance at the Economic Club of Washington.
Biden, however, did suggest that there would be some volatility along the path to the Fed's target of 2% for consumer inflation.
James Knightley, the chief international economist for ING, said households will remain under pressure despite the higher-than-expected retail sales in January, which supports future rate hikes from the U.S. Federal Reserve.
"Today's numbers back the case for a March and probably a May hike, but it shouldn't push the case for Fed tightening beyond that," he said.
