Solid US retail sales give economy a boost heading into 2024
By Lucia Mutikani
WASHINGTON (Reuters) -U.S. retail sales increased more than expected in December, boosted by motor vehicle and online purchases, keeping the economy on solid ground heading into the new year.
The upbeat report from the Commerce Department on Wednesday, which prompted economists to upgrade their economic growth estimates for the fourth quarter, cast further doubt on financial market expectations that the Federal Reserve would start cutting interest rates in March.
It followed data this month showing strong employment and wage gains in December as well as a pick-up in consumer prices. Fed Governor Christopher Waller on Tuesday described the economy as «doing well,» which he said was giving the U.S. central bank «the flexibility to move carefully and methodically,» in terms on monetary policy.
«Households have continued to weather high interest rates and October's resumption of student loan payments,» said Will Compernolle, macro strategist at FHN Financial in New York. «While there are some signs of rising distress in credit card delinquencies, we see no strong evidence so far that the economy started 2024 on the verge of a downturn.»
Retail sales rose 0.6% last month after an unrevised 0.3% gain in November, the Commerce Department's Census Bureau said. Economists polled by Reuters had forecast retail sales gaining 0.4%. Retail sales are mostly goods and are not adjusted for inflation. Sales increased 5.6% year-on-year in December.
The almost broad rise in sales was led by online retailers, where sales advanced 1.5%. Shopping has moved to online and away from the traditional brick-and-mortar retailers, a trend that accelerated during the COVID-19 pandemic.
Receipts at motor vehicles and parts dealers
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