Retail sales rose at a huge 3.0% m/m rate, far exceeding expectations of 1.9%. The y/y rate hit 6.4%, however, that was below the average of 8.0% over the past six months. Retail sales ex-auto rose 2.3% m/m, sales ex-autos and gasoline rose 2.6%, and the “control” group which strips out several volatile components rose 1.7%. Those are strong numbers and are all substantially above expectations. Sales in almost every major category rose. However, gasoline sales were flat despite prices rising 2.2% in January compared to December.
There’s a problem with the data here, I believe. A substantial amount of the headline gain was driven by a 7.2% leap in restaurant and bar sales which was far, far above the pre-pandemic record of 4.5%, and far, far above the pre-pandemic average of 0.4%. Without the 7.2% m/m gain in restaurants and bars, overall sales would have been 2.3%, not 3.0%. And that 7.2% came after 0% in December ’22 and -0.2% in November ’22.
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