Americans curtailed their spending on electronics, home furnishings, and other discretionary products in February after starting the year in a shopping mood, as increased expenses for groceries, fuel, and housing ate up more of their budget.
According to the U.S. Department of commerce, retail sales grew 0.3 percent in January after a revised 4.9 percent increase in December, spurred by pay increases, good hiring, and more cash in bank accounts. The boost in spending in January was the most since late March after American households got a $1,400 last federal stimulus payment, reports Seattletimes.
Sales Upheld
In February, sales at upholstery and household furniture retailers declined 1%, while sales at electronics and appliance stores fell 0.6 percent. General merchandise retailers saw a 0.2 percent drop in sales, while internet sales dropped 3.7 percent.
As the fear of COVID-19 lessens, buyers are shifting more of their expenditure to services, resulting in a 2.5 percent increase in restaurant sales. And other pressures, like Russia’s invasion of Ukraine, might drive prices even higher. Western firms have withdrawn out of Russia as it pushed tank columns toward Kyiv, Ukraine’s capital, and extensively shelled Mariupol, the country’s southern seaport, and other cities.
Consumer Price Inflation
Consumer price inflation surged 7.9% over the last year, the highest level since 1982, according to the Labor Department. This was fueled by rising petroleum, food, and housing costs. That twelve-month period concluded in February, so it excludes the majority of the petroleum & energy price rises that accompanied Russia’s declaration of war on February 24.
Crude & oil and gas prices have risen by almost 30% in the year, though fuel futures have fallen this week.
Many businesses are bracing for supply shortages to worsen as a result of the war, with reports of low quantities of grain, vegetable oils, minerals, and technological components like chips also surfacing. Increasing COVID-19 cases and intensified restrictions in China, in conjunction with the Russian invasion, could exacerbate supply chain concerns.
