Retail Sales Grew 0.4% in December

Randal Sanchez
January 13, 2018

― Reuters picCHICAGO, Jan 13 ― U.S. holiday spending jumped 5.5 per cent ― its biggest gain since 2005 ― spurred by stronger employment, rising consumer confidence and expectations of higher wages and bonuses after the recent tax bill, the National Retail Federation said yesterday.

Consumer confidence reached a 17-year high in November, though it slid in December.

Online retailers reported a strong sales gain of 1.2 percent.

At the same time, NRF had forecast non-store sales growth, which includes online revenue, would come in between 11% and 15% to between $137.7 billion and $142.6 billion.

Total sales for November and December were $691.9 billion, exceeding the industry trade group's, which would have been an increase of between 3.6 and 4 percent. "With this as a starting point and tax cuts putting more money into consumers' pockets, we are confident that retailers will have a very good year ahead". Bon-Ton Stores, like many other retailers, has faced challenges as customers shifted from brick-and-mortar and mall shopping toward online retailing, and The Wall Street Journal has reported the chain has considered a possible bankruptcy filing.

U.S. Federal Reserve officials expected consumer spending will continue moderate growth in the near term, underpinned by the strength of the labor market, further improvements in household net worth, and buoyant consumer sentiment, according to minutes of Fed's policy meeting in December previous year. The results mean retail sales grew 4.2% in 2017, the most since 2014.

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"The economy was in great shape going into the holiday season, and retailers had the right mix of inventory, pricing and staffing to help them connect with shoppers very efficiently", said NRF Chief Economist Jack Kleinhenz. Visit MarketWatch.com for more information on this news.

The confidence will likely continue into this year, especially as shoppers look to spend year-end bonuses and any windfall from tax changes, Saunders said.

USA retail sales rose in December a year ago for four months running driven by strong holiday sales.

December sales gained 0.4% seasonally adjusted from November and advanced 4.6% unadjusted year-over-year, NRF indicated, citing United States Census Bureau data. Building materials and supplies stores were up 8.1%, furniture and home furnishings grew 7.5% and electronics and appliance stores were up 6.7%. Clothing and accessories managed a 2.4% increase.

Health and personal care stores increased 2.2% unadjusted year-over-year.

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