US Retail Sales Rise 3.8% In January Despite Omicron, Record-High Inflation

U.S. retail sales saw a notable boost in January with sales rising 3.8% despite concerns that rising inflation would push down the numbers while the Omicron variant of COVID-19 would deter shopping.

The Census Bureau released its latest data on Wednesday that showed sales at retail stores, online outlets and restaurants displayed their strongest monthly gains since last March. The data beat the Dow Jones estimates that expected a 2.1% gain in the retail sector.

The positive report more than made up for the results seen during December's disappointing holiday shopping season, when retail sales sagged by 2.5% in the weeks after Omicron hit the U.S.

Online shopping contributed the most on a percentage basis, with nonstore retailers seeing a gain of 14.5%. It's a sign that Omicron may have encouraged shoppers to stay away from stores. Furniture followed at 7.2% and automotives came in third with a 5.7% rise.

The news arrives at a time when inflation is at a 40-year high. Prices for goods have been hammered by lingering supply chain issues, high energy prices and a labor shortage that have driven up costs across the board.

The latest numbers will be important for the Federal Reserve to consider ahead of its next meeting in March. It is widely expected that the Fed will hike interest rates and put an end to its massive asset purchasing program that was launched to blunt the COVID-19 pandemic in March 2020.