Robust End-of-Year Retail Sales Figures Signal US Economic Strength

Key Points

• December retail sales rise 0.6%, beating forecasts
• Annual retail growth at 3.2%, sector-specific gains notable
• Strong retail sales signal bullish economic trend

US Retail Sales Surge in December, Signaling Economic Strength

December 2023 saw a significant uptick in U.S. retail sales, marking a strong end to the year and underscoring the resilience of the American consumer. Sales at U.S. retailers rose by 0.6% from November, surpassing both the previous month’s 0.3% gain and economist predictions, as reported by the Commerce Department. This increase reflects not just a seasonal upswing but a deeper trend of robust consumer spending.

Monthly and Annual Growth

The advance estimates for U.S. retail and food services in December 2023, which reached $709.9 billion, were up by 0.6% from November and an impressive 5.6% from December 2022. These figures, adjusted for seasonal variations but not price changes, demonstrate a consistent year-over-year growth pattern. For the entire year, total sales were up 3.2%, with the last quarter showing a 3.9% increase from the same period a year ago.

Sector-Specific Growth

The retail trade specifically saw a 0.6% monthly increase and a notable 4.8% rise from the previous year. Nonstore retailers experienced a significant year-over-year growth of 9.7%, while food services and drinking places climbed by 11.1% from December 2022. These numbers highlight the diverse areas of growth within the retail sector.

Strong GDP Indicator

The control group’s robust 0.8% increase, which feeds into GDP estimates, along with gains in other areas such as ex-autos and gas (0.6%) and ex-autos (0.4%), all exceeded expectations. These figures reinforce the idea that American household resilience continues to defy skeptics.

Short-Term Outlook: Bullish for Economy

Based on the December surge and the sustained growth across various retail segments, the short-term outlook for the U.S. retail sector remains bullish. The strong end-of-year performance, coupled with the diverse areas of growth, points to a continued upward trend, driving the economy forward into 2024.