In December, U.S. retail sales increased as households purchased a range of goods and the figures for the month prior were revised higher, which indicates the economy entered 2018 with strong momentum.
On Friday, The Commerce Department announced that retail sales rose 0.4 percent last month and November’s data was revised to illustrate that sales gained 0.9 percent instead of the previously reported increase of 0.8 percent. Retails sales rose 5.4 percent in December of 2016.They advanced 4.2 percent in 2017 compared to 3.2 percent in 2016.
Last month’s sales were supported by a 1.2 percent jump in sales at gardening and building material stores. Sales at auto dealerships increased by 0.2 percent, while sales at service stations were unchanged.
Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3 percent in December following a higher revised 1.4 percent increase from the previous month. These so-called core retail sales are the most consistent with the consumer spending element of gross domestic product (GDP). They were previously reported to have gained 0.8 percent in November.
Both December’s increase in retail sales and the strong upward revision to November data strengthens economists’ expectations of an acceleration in consumer spending for the fourth quarter. Consumer spending, which makes up for over two-thirds of U.S. economic activity, increased at a 2.2 percent annualized rate for the third quarter.
The economy strengthened at a pace of 3.2 percent during that period. Spending could get a boost from last month’ $1.5 trillion package of tax cuts that was passed by the Republican-controlled U.S. Congress and then signed into law by President Trump.
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In December, electronics and appliance stores sales dropped 0.2 percent. Sales at clothing stores dropped 0.3 percent, while online retailers’ sales gained 1.2 percent.
Receipts at restaurants and bars gained 0.7 percent, the biggest increase seen since January. Sales at sporting goods and hobby stores fell by 1.6 percent, the largest decline seen since November 2016.