U.S. shoppers eagerly reached for their wallets and credit cards in December, spending far more than expected, according to Commerce Department statistics on Wednesday.
U.S. retail sales rose 0.6% from the previous month, well above expectations for a 0.2% increase. Compared to the previous year, sales increased by 4.8%.
Sales of cars and trucks drove this figure. Retail sales, excluding car dealer sales, rose 0.4%. This was still double the expected 0.2%.
Retail sales, excluding gas station and car sales, rose 0.6%, also twice as much as expected. Sales excluding gas stations increased by 0.7%.
Sales at restaurants and bars were flat. Retail sales, which exclude gasoline, auto and restaurant sales, rose 0.6%.
Sales are seasonally adjusted to take into account the surge in holiday sales. Not adjusted for inflation.
Sales rose 3% at department stores and 1.3% at broader supermarkets. Clothing store sales increased by 1.5%. Sales in the retail sector, which includes bookstores, sporting goods stores and hobby shops, rose 0.3%.
Grocery store sales rose 0.2%. Home and garden center sales increased 0.4%.
Sales at home electronics retailers and home electronics retailers decreased. Furniture store sales also fell, likely reflecting a drop in home sales due to rising interest rates.
Online sales increased 1.5%.
The much better-than-expected sales figures suggest a tight labor market is supporting consumer resilience, which in turn is supporting rising labor demand. But this “virtuous cycle'' of employment and spending could mean that inflation remains above the Federal Reserve's 2% target.
Fed officials said they are closely monitoring future data to determine when they can start cutting rates. December retail sales figures weigh on short-term cuts.
Sales of “Retail Management Group” – Sales used in official estimates of economic growth—The index rose 0.8% for the month, far exceeding expectations. The control group sales for the previous month was revised upward from 0.4% increase to 0.5% increase. Taken together, these numbers are likely to push up expectations for economic growth in the fourth quarter of last year.
