Record US household saving likely to cushion against inflation as retail sales slow

by   |  VIEW 838

Record US household saving likely to cushion against inflation as retail sales slow

On Wednesday, US Commerce Department data had unveiled that US retail sales grew moderately in February as skyrocketing gasoline prices coupled with soaring price tags in basic consumer goods like of food and medicine had forced Americans to slash their slated spending on a clutch of big-ticket items ranging from furniture to home appliance to electronics, heightening up likelihoods of a plausible slow down in economic growth over the current quarter, however, a record US household wealth could hand out a temporary cushion against a lacerating inflation surge, suggested analysts.

Nonetheless, US retail sales data for January were revised higher compared to an initial estimate, even as record gasoline prices alongside higher food prices were adding to holocaust on US economic growth over Q1, 2022.

Meanwhile, as common Americans are more likely to find a breathing space stemming off a $2.5 trillion in additional savings, which were allotted before and after the November US Presidential election with Biden Administration reimbursing more than a $6 trillion in pandemic-associated aids in expense of an empty US Treasury that will require the US Fed to raise its debt-ceiling for the third time in less than half a year in a near-term, a senior economist at BMO Capital Markets in Toronto, Sal Guatieri said, “Though cooling after January's splurge, American consumers appear reasonably well positioned to keep spending, supported by recent massive job gains and high household savings”.

US retail sales slow down in February

According to US Commerce Department data, US retail sales rose 0.3 per cent in February, while data from January were revised higher to an increase of 4.9 per cent compared to a previously reported 3.8 per cent.

Nonetheless, an analysts’ poll had been expecting the US retail sales to plunge by 0.4 per cent in February. Over the past twelve months through February, US retail sales surged 17.6 per cent on an annualized basis.