U.S. retail sales increase in December; November sales revised up
WASHINGTON, (Reuters) – U.S. retail sales rose for a third straight month in December, with households buying a range of goods even as they cut back on purchases of motor vehicles, which could strengthen the view that the economy maintained a moderate growth pace at the end of 2019.
The Commerce Department said on Thursday retail sales increased 0.3% last month. Data for November was revised up to show retail sales gaining 0.3% instead of rising 0.2% as previously reported. Economists polled by Reuters had forecast retail sales would gain 0.3% in December. Compared to December last year, retail sales accelerated 5.8%.
Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.5% last month after falling by a downwardly revised 0.1% in November.
The so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have edged up 0.1% in November.
Sales rose in December despite retailers such as Target Corp (TGT.N), Kohl’s (KSS.N), J.C. Penney (JCP.N) and Macy’s (M.N) reporting a decline in sales for the holiday period as foot traffic in malls dropped.
Though a report last week showed a slowdown in job growth in December and the increase in the annual wage gain retreating to below 3.0%, consumers will continue to shoulder the longest economic expansion on record, now in its 11th year, thanks to higher savings, rising house prices and a bullish stock market.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, grew at a 3.2% annualized rate in the third quarter. Growth in consumer spending is expected to have slowed to around or below a 2.5% rate in the fourth quarter. The economy expanded at a 2.1% pace in the July-September period.
Growth estimates for the fourth quarter are as high as a 2.5% rate, in part because of a drop in imports, which compressed the trade deficit.
In December, auto sales fell 1.3%, the biggest drop since last January, after increasing 1.5% in November. Higher gasoline prices lifted receipts at service stations, which jumped 2.8%. Online and mail-order retail sales rose 0.2% after being unchanged in November.
Sales at electronics and appliance stores rebounded 0.6% in December. Receipts at building material stores surged 1.4% and sales at clothing stores accelerated 1.6%. Spending at furniture stores edged up 0.1%.
Americans also spent more at restaurants and bars, with sales rising 0.2% last month. Spending at hobby, musical instrument and book stores rebounded 0.9%.
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