The strong retail sales data in January is not sustainable, and it is difficult for the United States to achieve both a "soft landing" and a "rapid decline in inflation"

The January retail sales data in the United States was stronger than expected, rising 3.0% compared to the previous month, which was higher than the Bloomberg consensus forecast of 2.0% and significantly higher than December's -1.1%. In terms of structure, all 13 retail categories saw growth, with durable goods such as automobiles, furniture, and electronics experiencing a significant increase compared to the previous month, while food services and bar retail sales increased by 7.2% compared to the previous month.

The main reasons for this include:

1. A robust labor market and an increase in disposable income expectations. The core factor that affects the consumption ability of US residents is still employment and wages. In January, non-farm payroll data performed significantly better than expected, supporting residents' consumption confidence.

2. The delayed timing of Christmas and Thanksgiving promotions often leads to clearance discounts after the shopping season. This is evidenced by the strong consumption data for durable goods in January, such as automobiles, furniture, and appliances.

3. The significant increase in food services and bar retail sales may be due to extreme weather during the Christmas period, which suppressed demand for eating out in the previous month.

4. The slowdown in the month-on-month growth rate of building materials reflects the trend of the real estate cycle continuing to decline under the Federal Reserve's continued interest rate hikes.

The strong consumption has reduced concerns about a hard landing for the US economy, but many supporting factors for January consumption are not sustainable, and it cannot be directly assumed that the trend of the US economic recession has turned around. At the same time, strong consumption has reduced the possibility of rapid inflation decline. The downward trend in US inflation has been basically established, but there are still many instabilities, and there is no guarantee that it will not rise again, leading to a possible extension of the interest rate hike process and an increase in terminal interest rates.