U.S. retail sales grow more quickly than expected in December

U.S. retail sales grow more quickly than expected in December

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. Gasoline station sales are up 12.5% since December 2016.

Sales of furniture grew by 0.7% to $10.33bn, while those of building materials increased by 1.2% to hit $32.98bn.

Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3 percent in December following a higher revised 1.4 percent increase from the previous month. Miscellaneous store retailers, which includes the likes of dollar stores and Walmart, lost 2.9 percent in sales in December, perhaps because of market saturation.

United States retail sales grew more strongly than expected last month amid especially strong demand for building materials and for on-line retailers.

Economists and advisors had expected robust spending across the board due to strong employment and consumer confidence.

Traders were also digesting some closely watched economic data, including a report from the Commerce Department showing retail sales rose in line with economist estimates in the month of December. They were previously reported to have increased 0.8 percent in November. Consumer spending has continued to rise, supported by factors including low unemployment and rising consumer confidence, though the rate of growth has eased in recent years.

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Economists had expected retail sales to rise by 0.4 percent compared to the 0.8 percent increase originally reported for the previous month. Health and personal-care outlets rose 2.2 percent, while sporting goods dropped 0.5 percent.

Retail stocks are up, some over 3%, on solid numbers from the National Retail Federation. Sales at online retailers soared 1.2 percent.

"We knew going in that retailers were going to have a good holiday season, but the results are even better than anything we could have hoped for", said Matthew Shay, NRF president and CEO. "With this as a starting point and tax cuts putting more money into consumers' pockets, we are confident that retailers will have a very good year ahead".

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

Retail spending represents 35 percent of all spending in Philly, and grew 3.7 percent during the holiday season.

"Any time you have a season like this, it can't be bad for retailers", said Glenn Fodor, First Data's head of information and analytics solutions.

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