US retail sales rise by the most in three months to limit holidays

U.S. retail sales rose at the strongest pace in three months in December, capping a strong holiday season that suggests consumer resilience heading into the new year.

The value of retail purchases, not adjusted for inflation, rose 0.6% in a broad advance, Commerce Department data showed Wednesday. Excluding automobiles, sales rose 0.4%.

Nine of 13 categories posted increases, with the biggest gains in apparel, general merchandise stores (including department stores) and e-commerce. Motor vehicle sales rose 1.1%, matching the biggest increase since May, while gas station sales fell for a third month as prices at the pump fell.

U.S. Treasuries and stock futures fell as traders reduced their bets on the Federal Reserve's interest rate cuts this year.

The figures cap a year in which household spending surprisingly largely rose, confounding economists' forecasts of a recession. However, forecasters see that momentum fading in 2024 as consumers face persistent inflation, high borrowing costs and dwindling savings.

“We continue to think a new slowdown is coming, as the slowdown in employment and wage growth is passed on and the delayed impact of higher interest rates takes an additional toll, but there is still little sign that it is on the horizon. a steeper slowdown,” said MP Andrew Hunter. said the chief U.S. economist at Capital Economics, in a note to clients after publication.

Sales in the so-called control group, which are used to calculate gross domestic product, rose 0.8%, the most since July. The measure excludes food services, car dealerships, construction materials stores and gas stations.

Retail trade figures largely reflect merchandise purchases, which make up a relatively narrow proportion of total consumer spending. December figures on total personal consumption expenditures will be published later this month.

A report last week showed that prices of goods, excluding food and energy, broke a months-long decline in December, as prices for used cars and clothing rose despite holiday promotional activity. anus.