Retail Sales Surge and Consumer Confidence Improve Despite Labor Market Uncertainty

Consumer Confidence Finally Matches Economic Growth

According to a CNBC/National Retail Foundation (NRF) report released Monday, core retail sales, excluding volatile automobile, gasoline, and restaurant sales, were 3.2% higher than the year-ago in January. This showed that consumers sustained their spending habits into 2024, driving sales higher again in January. The report also measured for December and was better than the 2.4% year-over-year sales growth. Retail sales were up in six of nine categories tracked by the NRF, including health, clothing, and groceries.

In other news, a monthly survey of 1,300 households conducted by the Federal Reserve Bank of New York revealed that household views on personal finances and the economy are looking brighter as high inflation continues to fade. In January, many people said their finances were better off than a year ago, and the median expectation for the inflation rate in three years fell to 3.03%, its lowest since March 2020. Despite the more positive outlook, people took a dimmer view of some aspects of the labor market. On average, people said they had a 54.2% chance of finding another job in the next three months if they lost their current position, the lowest since September 2021. Recent government data on the labor market has been mixed, with companies still hiring at a brisk pace though many have pulled back on job openings in recent months.

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