US: Retail Sales rise by 3% in January vs. 1.8% expected

Retail Sales in the United States rose by 3% to $697 billion in January, the US Census Bureau reported on Wednesday. This reading followed December’s decrease of 1.1% and came in better than the market expectation for an increase of 1.8%.

Retail Sales ex-Autos expanded by 2.3% in the same period, compared to analysts’ estimate of +0.8%.

The data arrived as follows:

• US Retail Sales Advance (MoM) Jan: 3.0% (est 2.0%; prev -1.1%).
• US Retail Sales Ex Auto (MoM) Jan: 2.3% (est 0.9%; prev -1.1%).
• US Retail Sales Ex Auto And Gas Jan: 2.6% (est 0.9%; prev -0.7%).
• US Retail Sales Control Group Jan: 1.7% (est 1.0%; prev -0.7%).

The US Dollar index strengthened to almost 104 on Wednesday, the highest in nearly five weeks after a stronger-than-expected US CPI report bolstered expectations the Federal Reserve will need to keep pushing interest rates higher to bring down inflation. It moved to below 104 into the New York session as traders got set for the Retail Sales data which kept Gold bulls in the game ahead of the data.

On Tuesday, the annual inflation rate in the US slowed slightly to 6.4% in January from 6.5% in December, the lowest since October 2021 but above market expectations of 6.2%. The latest Fed commentary also showed that policymakers largely backed more rate increases, fueling a bid in the greenback after what was an indecisive show from markets around the inflation data initially.