American consumers ended the year on a spending spree, with retail sales rising 0.4% in December from the previous month, according to the latest government snapshot. The modest increase suggests that despite higher prices and interest rates, low unemployment and rising wages are encouraging shoppers to spend, bolstering economic growth.
The data also marks a strong start for retailers during the winter holiday shopping season. Sales at sporting goods stores jumped 2.6%, while furniture outlets reported a 2.3% surge in purchases. Car sales saw a 0.7% increase, contributing to the overall sales growth.
However, some retail chains struggled, with building materials stores and restaurants seeing sharp declines. Adjusted for inflation, retail sales rose 3.9% in December compared to the same period last year, while goods prices have remained relatively stable.
The National Retail Federation reported a 4% increase in holiday sales compared to the previous year, driven by lower inflation on holiday goods. This trend suggests that shoppers are becoming more deal-focused in their spending habits, a pattern expected to continue in 2025.
Economists remain hopeful that the Federal Reserve will cut its key rate further this year, citing slower core inflation figures and cooler prices. The retail sales report comes ahead of the National Retail Federation’s annual conference, where executives will discuss issues including shopper caution and tariffs.
“We want to be a good trading partner with the rest of the world,” said Tony Spring, CEO of Macy’s Inc., on the topic of potential tariffs. The retailer is taking steps to diversify its sourcing and work with partners to mitigate any impact from Trump’s proposed tariffs.
Source: https://apnews.com/article/economy-jobs-consumers-retail-41198c67d1d9b6bcd353a054fb4f7203