Consumer spending bounced back sharply in January as rising inflation and a post-holiday surge kept cash registers ringing. Retail sales for the month rose 3.8%, much better than the 2.1% Dow Jones estimate. Online shopping contributed the most on a percentage basis, with nonstore retailers seeing a gain of 14.5%.
Prices at the wholesale level jumped twice the expected level in January as inflation pressures were unabated to start the year. The producer price index, which measures final demand goods and services, increased 1% for the month, against estimates for 0.5%. Over the past 12 months the gauge rose 9.7%, which is a record in data going back to 2010.
The price of lumber has been on a roller coaster since the start of the pandemic, and it’s climbing a big hill yet again. After falling back sharply from a record high in May of last year, lumber prices began climbing again in December. They are now about 22% lower than that peak, but still about three times their average pre-pandemic price. The National Association of Home Builders estimated the recent price jump added more than $18,600 to the price of a newly built home. It also added nearly $7,300 to the cost of the average new multifamily home.