E Economics

US Retail Sales Smashed Expectations In January

17 February, 2021


As I expected, US retail sales rebounded sharply in January and beat the Bloomberg consensus (+1.1%e MoM). The value of overall sales increased 5.3% from the prior month, rising the most in seven months. Excluding autos, sales rose 5.9%, also far ahead of the 1% estimate. Looking at the details, electronics and appliances saw the biggest jump, up 14.7% for the month, while furniture and home furnishing stores were up 12%. As I noted, US retail sales were mainly supported by the seasonal pattern, stimulus checks and favourable weather conditions.


us retail sales


They should remain well oriented in the coming months with households on track to spend a part of savings accumulated during the pandemic. According to my estimates, total excess savings over the period [Mar. 2020 – Jan. 2021] should exceed $1.6 trillion. In addition, another fiscal stimulus is likely to be passed this quarter and will probably include another batch of checks. As a result, total excess savings could exceed $2 trillion by 2Q21.

excess personal savings


In a context where the health situation is likely to improve in the coming months (due to acceleration of vaccine rollout), more states should ease restrictions. In the meantime, consumer confidence should rebound in line with an improving labour market, which should translate into more spending.


All in all, today’s figures reinforce my view that US growth should exceed expectations in 2021 and even top the 5% mark.