CIBC Research discusses its reaction to today's US retail sales report for the month of January.

"US retail sales more than made up for December's weakness in January, as sales surged by 3.0%, well above the 2.0% expected by the consensus. That included a sharp rise in both auto sales and spending at restaurants. The control group of sales (ex. autos, restaurants, gasoline, and building materials), which feeds more directly into non-auto goods consumption in the GDP calculation, posted an impressive 1.7% increase, above the consensus expectation of 1.0%," CIBC notes. 

"This data confirms that the quarter is off to a stronger start than previously thought and cements the need for higher interest rates for longer, as this leaves sales volumes in the control group 6% above their pre-pandemic trendline, reflecting a roughly 1.4% m/m increase in control group volumes," CIBC adds.