The U.S Commerce Department announced the monthly retail report on Thursday that highlighted the U.S retail sales to have hiked for the third consecutive month in December. While sales of motor vehicles remained under pressure, households were reported to have spent sufficiently in December in multiple other categories that supported the previously accentuated perspective that the U.S economy ended the last year with a moderate growth rate.
Retail Sales Improved By 5.8% In December As Compared To The Same Month Last Year
Thursday’s data reported the U.S retail sales to have gained 0.3% in December. The figure for November was also revised and upgraded from the previously reported 0.2% to 0.3% instead. Economists had forecasted a 0.3% growth in the U.S retail sales for December. In terms of year over year growth, U.S retail sales increased by 5.8% in December.
Excluding a few components like building materials, gasoline, automobiles, and food services, a wider expansion of 0.5% was noted in December’s retail sales. As per the revised data, November’s retail sales excluding such items were recorded at 0.1%.
On the core retail sales front, the data showed a 0.7% improvement in December against the analysts’ estimate of 0.5% for the month. In November, the Commerce Department had announced the core retail sales to have remained unchanged (0.0%).
The rise in retail sales in December came as a surprise as almost all of the major U.S retailers including J.C Penney, Target Corp, Macy’s, and Kohl’s had recently declared their holiday sales to have dropped as customers preferred online shopping over visiting the brick and mortar stores.
U.S Economic Expansion Is Currently In Its 11th Year
The economic data released earlier in January had hinted at a slight loss of pace in employment last month while the annual gain in wages was also seen sinking below 3.0% again. Thursday’s report, however, suggests that due to the strongly bullish stock market, increasing house prices, and widening savings, consumers in the United States are willing to support the economic expansion (currently in the 11th year) that has been branded the longest ever recorded in history.
A 3.2% annualized rate was registered for the U.S consumer spending in the third quarter. The estimate for the fourth quarter is currently capped at 2.5%. Economic expansion through July to September was recorded at the rate of 2.1%. Consumer spending constitutes two-thirds of the overall economic activity in the United States.
Following the optimism of the retail sales report, EUR/USD fell from the daily high of around 1.1170 to 1.1130.