December Retail Sales Show Slight Slowdown After Six Months of Surprises
Explore how U.S. retail sales in December showed growth but missed economist expectations, ending a six-month streak of consumer spending surprises while still indicating a strong holiday season and healthy economic outlook.
Highlights to Know
- December retail sales increased but fell just short of economist forecasts, ending a six-month trend of consumers outpacing spending predictions.
- Experts remain optimistic, noting that U.S. consumers continue to be a driving force behind economic growth.
- Holiday sales for 2024 exceeded expectations, signaling a robust shopping season.
After six consecutive months of surpassing expectations, U.S. consumer retail sales in December grew modestly but didn’t quite meet economists’ forecasts, reflecting a slight cooling in spending momentum during the holiday period.
According to the Census Bureau, retail sales hit $729.2 billion last month, marking a 0.4% increase from November’s revised figures. Economists polled by The Wall Street Journal and Dow Jones Newswires had anticipated a stronger 0.5% rise.
Despite the minor shortfall, analysts emphasize that the data still points to a resilient economy. Notably, “control group sales,” which are key inputs for calculating the gross domestic product (GDP), surpassed expectations, suggesting steady economic growth in the fourth quarter.
“This indicates that consumers remain confident and financially healthy, which is crucial since consumer spending accounts for about two-thirds of the U.S. GDP,” explained Bret Kenwell, U.S. investment analyst at eToro.
Strong Holiday Sales Outperform Forecasts
The holiday sales season saw strong performances from miscellaneous stores, sporting goods retailers, and furniture dealers, while sales declined in building materials, restaurants, and bars.
Overall, retailers outpaced holiday sales projections, with Wells Fargo economists reporting a 4.1% year-over-year increase, surpassing their forecasted 3.3% growth.
“When combined with upward revisions to November sales, the data positions the 2024 holiday sales just below the long-term average, indicating a solid season for retailers,” noted Wells Fargo economists Tim Quinlan, Shannon Grein, and Jeremiah Kohl.
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