Retail sales slip
Retail sales declined 1.9% for the month in December, stunted by supply shortages and rising consumer prices, according to the January 14 Department of Commerce retail sales report. However, sales rose 16.9% year-over-year from December 2020 through December 2021, as businesses continued to rebound from the pandemic slowdown.
Building material sales were up 0.9% for the month of December and 12.5% year-over-year from December 2020, while department store sales were down 7.0% for the month but up 22.5% from a year earlier; auto sales were down 0.7% for the month but up 9.6% from a year earlier; and non-store retailers (primarily online) were down 8.7% for the month but up 10.7% from a year earlier. With consumers returning to restaurants and bars, sales at food services and drinking establishments were up 41.3% from a year earlier, although, with the Omicron variant surging, sales were down 0.8% for the month.
Employment gains dwarf expectations
Economists had expected a relatively low count of new jobs in January due to the impact of the Omicron variant, but instead, the U.S. added nearly half a million new jobs for the month.
According to the Employment Situation Report issued February 4 by the Department of Labor (DOL), the economy added 467,000 new jobs in January. Despite the gains, the unemployment rate ticked up 0.1% to 4.0%. Employment growth was particularly strong in several industries, including leisure and hospitality, professional and business service, retail trade, and transportation and warehousing.
Average hourly earnings for all employees on private nonfarm payrolls rose by $0.23 to $31.63 in December.
Energy booms while most sectors suffer
The Energy sector of the S&P 500 jumped 19.10% in January to lead all sectors. The only other sector in positive territory was Financials, up just 0.06%. Biggest losers for the month were Consumer Discretionary, down 9.68%, Real Estate, down 8.50%, Information Technology, down 6.89%, and Materials, down 6.84%.
The chart below shows the results of the 11 sectors for the past month: