Rebounding from 6.2 percent declines in December, consumer spending on clothing and footwear, and home furnishings and durable household equipment, increased in January, according to seasonally adjusted estimates released Friday by the Bureau of Economic Analysis (BEA).
The BEA numbers outpaced those from the U.S. Census Bureau compiled by the National retail Federation (NRF) earlier this month that showed clothing and clothing accessory store sales up 0.7 percent month-over-month seasonally adjusted and 19.1 percent unadjusted year-over-year. That same report has furniture and home furnishings store sales increasing 7.2 percent in the month and 1.5 percent unadjusted year-over-year.
“January sales overcame major headwinds that make the results all the more impressive,” NRF chief economist Jack Kleinhenz said. “A triad of forces weighed on consumer behavior and spending as weather slammed a large portion of the United States, the omicron variant was relentless and inflation was escalating. On top of that, the enhanced child care tax credit ceased at the end of 2021, impacting millions of families. Despite all that, consumers ramped up spending even after a record-breaking holiday season.”
Overall PCE increased 2.1 percent, or $337.2 billion, in January, reflecting an increase of $285.4 billion in spending for goods and a $51.8 billion increase in spending for services, BEA said. Within goods, increases were widespread, led by motor vehicles and parts, nondurable goods, and recreational goods and vehicles. Within services, the largest contributor to the increase was spending for housing and utilities.
Real PCE, adjusted for inflation, increased 1.5 percent. Goods were up 4.3 percent and services inched up 0.1 percent.
The PCE price index increased 0.6 percent in the month. Excluding food and energy, the PCE price index increased 0.5 percent. The PCE price index for January increased 6.1 percent from one year ago, with increases in goods and services, BEA noted.
Energy prices increased 25.9 percent, while food prices increased 6.7 percent. Excluding food and energy, the PCE price index for January increased 5.2 percent from one year ago.
Personal income was basically flat, while disposable personal income (DPI), a gauge for retail spending, increased 0.1 percent, or $19.8 billion. Real DPI decreased 0.5 percent in January.
Personal outlays increased $342.2 billion in January. Personal saving was $1.17 trillion in January and the personal saving rate–personal saving as a percentage of disposable personal income–was 6.4 percent.
“The estimate for January personal income and outlays reflected the continued economic recovery and government response to the Covid-19 pandemic,” BEA said. “In January, Covid-19 cases resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country. Government social benefits decreased, primarily reflecting the end of advance Child Tax Credit payments authorized to be paid out through December by the American Rescue Plan Act of 2021.”