U.S. retail sales increased by the most in 10 months in January, lifting the level of sales to a record high amid a surge in purchases of motor vehicles and other goods, but higher prices could limit the boost to economic growth this quarter.
The report from the Commerce Department on Wednesday showed underlying strength in the economy ahead of anticipated interest rate increases from the Federal Reserve starting in March, although retail sales in December were much weaker than initially estimated. “The strong rebound in January retail sales, though partly in response to last year’s weak finish and inflated by higher prices, suggests consumers still have plenty in the tank to propel the expansion forward this year,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “Rate hikes won’t cool their jets for a while, making the Fed’s job of driving down inflation that much harder.”
Retail sales surged 3.8% last…
