- Janet Yellen, Fed Chairwoman
US retail sales climbed slightly in January, rising for the third consecutive month, evidence that Americans kept shopping despite steep declines in equity prices. According to the Commerce Department, retail sales increased a seasonally adjusted 0.2% last month, the same as in December. Excluding the effect of falling gas prices, sales increased 0.4%. Americans boosted their purchases in January of autos, home supplies and groceries, and spent more online. Greater job security, rising wage growth and falling gasoline prices may be encouraging more consumers to loosen their purse strings after a fourth-quarter slowdown. A pickup in household purchases, which makes up the lion's share of the economy, would help the US prevent the negative effects of a strengthening US Dollar, weak foreign demand and tumultuous financial markets.
Continued improvement in the labour market is keeping Americans spending. US employers added 151,000 to payrolls in January after expanding headcounts by 262,000 the in the prior month. In addition to that, average hourly earnings increased 2.5% in the 12 months ended January following a 2.7% gain in December that was the most since 2009. Consumers are the engine that has been powering the US economy for the past two years as they account for roughly 70% of GDP.
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