Economy Watch: Retail Sales Gain Ground in December

Economy Watch: Retail Sales Gain Ground in December

Despite December's solid numbers, most categories of retailers did better in November than in December.

The number, which excludes restaurants, automobile dealers and gasoline stations, includes $138.4 billion in online and other non-store sales, which were up 11.5% over the year before.

Retail sales - a measure of consumer spending at stores, restaurants and websites - increased a seasonally adjusted 0.4% in December from the prior month, the Commerce Department said Friday, matching expectations of economists surveyed by The Wall Street Journal.

Holiday sales rose to $691.9 billion in November and December, marking a 5.5 percent increase from the year before, according to the National Retail Federation.

Building materials and supplies stores posted the biggest sales increases, rising by 8.1% over the previous year.

The U.S. Department of Commerce confirmed on Friday what retailers have been hinting at since Christmas - that the holiday season gave them a much-needed lift, fueled by strong demand for home goods and electronics, and a surge in online purchases.

For the whole 2017, retail sales jumped 4.2 percent from 2016, the strongest growth since 2014.

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

Ebullient U.S. consumers shopped at the healthiest pace in more than a decade during the holiday season, a sign of burgeoning economic strength.

"After years in hibernation, consumers - accounting for 70 percent of GDP - are finally flexing their spending muscles", Johnson said.

Jeremy Andrus, chief executive officer at Traeger Grills, a Salt Lake City, Utah-based maker of wood pellet grills, said Traeger's fastest-selling grill shifted from an $800 model to a $1,000 model this holiday season as consumers showed a willingness to reach deeper into their pockets.

Every retail category except for sporting goods showed gains during the final two months of the year, according to the NRF. The NRF had forecast a strong season but it only anticipated sales growth of 3.6 and 4 percent.

Overall though, the IHS said the holiday sales lifts its outlook for the fourth quarter. Among the top 30 cities, Philadelphia ranked No. 12 in terms of total dollars spent in November and December.

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