Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Retail Trade Sales February 16, 2022

On the back of an historic holiday shopping season and historic retail sales across all of 2021, U.S. advanced estimates of retail and food service sales for January 2022 rebounded from the -2.5% slide in December 2021. Sales for the beginning of the new year started off quite strong. Retail sales recorded a seasonally adjusted total of $649.8 billion in January, an increase of 3.8% from December despite moderating consumer confidence, concerns over omicron, inflation, and other obstacles. Notwithstanding these headwinds, January 2022 retail sales increased 13.0% year-over-year above January 2021.

Similar to increases in retail sales, prices continued an upward march where they increased 0.6% over January and by 7.5% from a year ago. Even with higher inflation, consumers were still not deterred from shopping in January.  In fact, despite the inflationary pressure, labor force issues, the omicron variant and other challenges, January’s retail sales illustrate the resolve of the consumer and retailers. In the face of no stimulus in sight, the conclusion of the child care tax credit, winter weather and intensifying inflation, consumers were armed with excess savings and increased income originating from a tighter labor market as they exercised their spending might in January. As consumers spent a record amount across the holiday shopping season, they continue to propel the economy forward. Retailers, similar to consumer resiliency, continue to adapt to and contend with the pandemic as they found ways to continue production and distribute goods to consumers amid increased demand.

We are confident in the continued growth of retail sales as we progress throughout 2022 with demand for goods remaining elevated despite a slight slowing recently. Even with the continuation of recent consumer spending patterns, services spending continues to recover and as consumers continue to adjust, they should progressively feel more comfortable returning to more pre-pandemic activities, which should elevate services spending.

On a year-over-year basis, all retail categories were up with the exception of electronics & appliance stores (-2.8%). Retail sales increased most in gasoline stations (33.4%) and food services and drinking places (26.9%). On a month-over-month basis, retail sales declined in 5 of 13 retail categories where sporting goods, hobby, musical instrument and book stores (-2.9%) saw the largest decline.