Washington, Feb 17 (AFP/APP): US shoppers resumed spending in January, as retail sales spiked 5.3 percent, the first increase since September, according to government data Wednesday.
The gain, far more than analysts had expected, was driven by increases in numerous categories, including furniture, electronics and sporting goods, the Commerce Department said.
Even excluding gasoline and vehicles, which economists expected to juice the headline data, sales were up 6.1 percent. Online merchants saw their sales surge 11 percent. Sales had declined in the final three months of 2020 as some government benefits and business support programs were winding down.
The January rebound came after Congress approved a new round of government aid in late December, including extended unemployment benefits, and amid rising optimism that President Joe Biden would soon deliver on his pledge to provide a massive $1.9 trillion rescue package.
Rubeela Farooqi of High Frequency Economics said the gain is “likely in response to fiscal aid that is providing critical support to household balance sheets.”
“Overall, we expect household spending to help lift growth in the first quarter,” she said in an analysis. It was the latest in a series of data reports showing an improving outlook and confidence. The New York Federal Reserve Bank said Wednesday that business leaders in the dominant services sector in the region are much more optimistic about the next six months, even as current activity continued to decline.
The index for future business activity rose eleven points to 32.5, and just over 50 percent of firms expect activity to expand and conditions to be better than normal in six months, the report said.
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