U.S. Retail Sales Post Solid Gains on Holiday-Shopping Rush
The value of receipts at retailers rose 0.3 per cent, matching the prior month's revised gain, and climbed 5.8 per cent from December 2018, Commerce Department figures showed Thursday. Stronger sales occurred in all major categories except motor vehicle dealers. Excluding autos, retail purchases jumped 0.7 per cent from the prior month, the most since July.
Closely watched retail “control group” sales increased 0.5 per cent, 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 per cent, a step down from an almost five per cent 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 Thursday 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 per cent in the fourth quarter compared with a six per cent 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 per cent from a year earlier in the November-December period, well below 2018’s 5.7 per cent 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 per cent, the most since July, the department-store subcategory registered a 0.8 per cent 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 per cent, while receipts at nonstore retailers that include online purchases jumped 13.1 per cent.
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 per cent, the biggest gain since March, the report showed. Excluding automobiles and gasoline, retail sales climbed 0.5 per cent after a 0.2 per cent 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 Thursday showed the import price index rose 0.3 per cent in December from the prior month, the most since March, and 0.5 per cent from a year earlier. Excluding petroleum, the index increased 0.2 per cent from the prior month.