United States retail sales rise in December, capping a strong year in spending


"General merchandise sales (without food or autos) barely moved up, and most of the increase was in non-store retailing", Erik Gordon, professor at the University of Michigan's Ross School of Business, told Retail Dive in an email. Macy's posted same-store sales growth of 1.1 percent for November and December. Still, tepid results from department stores and apparel retailers show that not every company will benefit from more shopper spending.

Over the holidays, the strongest performers were building material and supply stores (8.1 percent growth ), furniture (7.5 percent growth) and electronics (6.7 percent growth).

Total retail sales volumes grew at a 0.4% month-on-month pace in December to reach $495.38bn, according to the Department of Commerce.

Core retail sales - excluding automobiles and parts - grew 0.4%.

GlobalData Retail managing director Neil Saunders cited these factors: Consumer confidence at 17-year highs, steady wage growth of about 3 percent, the booming stock market, and the robust housing sector.

While strong sales were widely expected, many retailers were particularly hungry to prove themselves this past holiday season, following a year marred by tumbling stock prices, management shakeups, a slew of store closures and several industry bankruptcies.

Holiday sales from November 1 through December 31 rose 5.5 percent over the same period in 2016, to $691.9 billion.

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With the optimistic outlook for consumer spending, Fed officials expected the USA economy to grow 2.5 percent this year, an upgrade of 2.1 percent from their forecasts in September last year.

"After years in hibernation, consumers - accounting for 70 percent of GDP - are finally flexing their spending muscles", Johnson said. "We think the willingness to spend and growing purchasing power seen during the holidays will be key drivers of the 2018 economy".

Not all categories of retail fared well in December. 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. "But retail is retail, and will always be here to serve its customers".

Gasoline-station sales were flat in December from the prior month, according to the Commerce Department report.

Looking at specific categories, December sales and overall 2017 retail sales were a mixed bag.

Sales were uneven across other categories last month.