U.S. retail sales ended on a high note in December, exceeding economists’ expectations and signaling a positive outlook for economic growth in 2024. According to the Commerce Department, retail sales saw a seasonally adjusted increase of 0.6% compared to the previous month. This uptick follows a 0.3% rise in November, indicating a successful holiday season for retailers.
Compared to the same period in the previous year, December sales showed a 5.6% increase. Although slightly slower than the 5.8% growth seen in December 2022, this growth still outperformed inflation rates. The year-end consumer-price index from the Labor Department revealed a 3.4% rise in prices, which was a moderation from the previous year’s 6.5% increase.
This moderation in spending growth and price gains aligns with an economy that is successfully achieving a soft landing, as inflation remains controlled without triggering a recession.
Key areas of increased consumer spending in December included automobiles, clothing, department stores, and online platforms. However, spending remained flat at bars and restaurants, while categories such as furniture, electronics, and health and personal care stores experienced declines. When excluding spending on vehicles and gasoline stations, retail sales still demonstrated a solid 0.6% increase.
In conclusion, the robust end-of-year retail sales suggest a positive trajectory for economic growth in 2024. With moderation in spending and price increases, the economy appears to be finding a balance that promotes stability without sacrificing consumer confidence.
