WASHINGTON – US retail sales accelerated more than anticipated in December, helped by the auto sector, government data showed on Jan 17.
Sales picked up in the last month of the year by 0.6 per cent to US$709.9 billion (S$954.5 million), up from a 0.3 per cent bump in November, said the Commerce Department in its latest report.
For the full year of 2023, total sales were up 3.2 per cent from 2022, the report added.
The strong showing comes even though consumer demand was expected to weaken in the face of higher interest rates. In part, a resilient job market has helped support spending over the past year.
The Federal Reserve rapidly lifted the benchmark lending rate from early 2022 and has in recent months held rates steady at a high level, in order to lower inflation sustainably.
While this is typically expected to hit consumption as borrowing becomes more expensive, retail sales have generally held up.
Compared with December 2022, retail sales in December 2023 were 5.6 per cent higher, according to the latest data.
Among the different sectors, sales at motor vehicles and parts dealers rose 1.1 per cent from November in December, and those at department stores jumped 3 per cent, said the Commerce Department.
But sales at petrol stations were down by 1.3 per cent between November and December 2023, while those at health and personal care stores slipped 1.4 per cent.
Analysts warn that advance retail sales estimates may be revised significantly.
Before the report, economists believed that consumer spending, which accounts for more than two-thirds of US economic activity, topped a 2 per cent annualised rate in the fourth quarter. Growth estimates for the overall economy are currently as high as a 2.2 per cent rate. The economy grew at a 4.9 per cent pace in the third quarter.
The government is scheduled to publish its first estimate of gross domestic product (GDP) growth for the October to December quarter on Jan 25.
Some of the anticipated slowdown in GDP growth will likely reflect smaller inventory accumulation relative to the third quarter’s size. AFP, REUTERS