[Stay on top of transportation news: Get TTNews in your inbox.]
U.S. retail sales strengthened in December, thanks to a late holiday-shopping rush that wrapped up a more moderate year of spending at the nation’s merchants.
The value of receipts at retailers rose 0.3%, matching the prior month’s revised gain, and climbed 5.8% from December 2018, Commerce Department figures showed Jan. 16. Stronger sales occurred in all major categories except motor vehicle dealers. Excluding autos, retail purchases climbed 0.7% from the prior month, the most since July.
Treasury yields rose, and the dollar pared losses after the solid report. Other data showed a decline in unemployment claims and the highest reading since May for a regional manufacturing index.
Closely watched retail “control group” sales increased 0.5%, just above the median forecast in a Bloomberg survey of economists. The core measure excludes food services, car dealers, building-materials stores and gasoline stations, giving a better sense of underlying consumer demand.
For all of 2019, the value of retail sales increased 3.6%, a step down from an almost 5% gain in 2018 that was the largest annual advance in six years and reflected a boost from tax cuts. At the same time, consumers will probably remain the economy’s chief source of fuel as companies continue to hire and household sentiment stays elevated.
Separate figures from the Labor Department on Jan. 16 showed jobless claims declined to a six-week low.
Personal consumption, which includes spending on services and merchandise, posted the largest back-to-back quarterly gains since 2014 in last year’s second and third quarters. Control-group retail sales decreased an annualized 0.3% in the fourth quarter compared with a 6% rate in the three months ended in September, indicating household spending cooled.
The Commerce figures came a day after Target Corp. joined other retailers in reporting weaker holiday sales. The retailer said comparable sales rose just 1.4% from a year earlier in the November-December period, well below 2018’s 5.7% growth. Same-store sales at Kohl’s Corp., J.C. Penney Co. and L Brands Inc. also fell during the period.
While the government reported December receipts at general merchandise stores rose 0.6%, the most since July, the department-store subcategory registered a 0.8% slump. That was the fifth straight decline and evidence of the change in Americans’ shopping habits. For all of last year, department-store sales declined 5.5%, while receipts at nonstore retailers that include online purchases jumped 13.1%.
Economic growth, strapped by weak business investment and sluggish manufacturing, has been more dependent on household consumption. Still-robust hiring, firmer incomes and elevated consumer confidence will probably continue to underpin consumers. That will help extend the record-long U.S. expansion and may aid President Donald Trump in his reelection campaign.
The retail sales report showed 12 of 13 major categories increased. At apparel stores, purchases increased the most since March, and sales at building-materials outlets posted the best advance since August.
Filling-station receipts increased 2.8%, the biggest gain since March, the report showed. Excluding automobiles and gasoline, retail sales climbed 0.5% after a 0.2% decline the previous month.
The sales data don’t capture all household purchases and tend to be volatile as they’re not adjusted for changes in prices. The government’s first estimate of fourth-quarter growth will offer a fuller picture of U.S. consumption in data due Jan. 30.
A separate Labor Department report Jan. 16 showed the import price index rose 0.3% in December from November, the most since March, and 0.5% from a year earlier. Excluding petroleum, the index increased 0.2% from the prior month.
Want more news? Listen to today’s daily briefing: