The US Census Bureau reported that retail sales increased by 0.4% in January to $472.1 billion. This represents an increase of 5.6% from the previous year.
Retail trade sales increased 5.6% from January 2016. Meanwhile, non-store retail sales increased 12% over the same time period, showing a continued trend toward internet based sales. Another major contributing factor was the increase in gasoline sales, which increased 14.2% year-over-year, reflecting the sharp increase in oil prices over the past 12 months. Other notable categories are health and personal care stores, which has increased 8.5%, and auto and other motor vehicle dealers which increased 7.5%. Meanwhile, food services and drinking places reported a 5.6% increase in sales.
Consumer prices also increased by 0.6% in January. This was the highest monthly inflation rate since 2013 and resulted in a year-over-year increase of 2.5%. Energy prices increased 10.8%, reflecting a 20.3% increase in gasoline process. This is due to the more than 60% increase in oil prices from January 2016 to January 2017.
It is important to note that the increase in inflation takes some of the luster out of the retail sales numbers. Yet when the 2.5% inflation rate is subtracted from the 5.6% increase in sales, it results in a still solid increase of 3.1%. In addition, the recent increase in energy prices may be short lived unless oil prices continue to rise as oil prices have remained fairly stable since the summer of 2016. Therefore, the pace of inflation may wane in future months.