US retail sales data for December showed the economy growing at a solid pace, with growth above economists’ estimates of 0.4%. The control group excluding volatile categories reported a 0.7% increase. However, headline retail sales rose only 0.4%, less than expected.
Sales in November were revised up to 0.8%, while December sales excluding auto and gas rose just 0.3%. A 4.3% rise in miscellaneous store retailer sales led the gains, while a 2% drop in building material sales contributed to the decline.
The strong report boosted fourth-quarter GDP growth estimates to 2.9%, according to Capital Economics chief North America economist Paul Ashworth. Wells Fargo senior economist Tim Quinlan noted that this year’s holiday shopping season was stronger than last, driven by a resilient labor market supporting household income growth.
Investors closely monitor the US economy, and with the recent jobs report showing a stronger labor market, they now expect a less than 50% chance of interest rate cuts until at least June. Nationwide chief economist Kathy Bostjancic attributes this to factors such as elevated inflation readings and changes in tariff and immigration policies supporting the Fed’s stance.
Source: https://finance.yahoo.com/news/december-retail-sales-signal-strong-economic-growth-to-end-the-year-133316074.html