Consumers rev up auto sales, increase their online shopping
WASHINGTON — Americans stepped up their auto buying and online shopping in December, reflecting a boost in confidence after the election and a solid increase in pay.
Retail sales rose a seasonally adjusted 0.6 percent, after a small 0.2 percent gain in November, the Commerce Department said Friday.
Most of the strength was in auto sales, which jumped 2.4 percent in December, the biggest gain since April. Gas station sales rose 2 percent, largely because of higher prices. Excluding autos and gas, retail sales overall were flat.
The figure disappointed some economists, who said it suggested that many consumers remain cautious.
“Retail sales appear healthy enough, but looking past the headline there are a few concerns about the strength of consumer spending,” said Paul Ashworth, an economist at Capital Economics. Yet “with consumer confidence surging to multiyear highs after the election and wage growth still solid, there is no reason to suspect that consumption growth is going to weaken in the first half of this year.”
And there were other areas of strength outside autos. Online retailers in particular reported better sales. Home and garden centers, furniture stores and sporting goods retailers also saw sales grow.
In another report, holiday sales rose 4 percent to about $658.3 billion, according to the National Retail Federation. That beat a forecast for a 3.6 percent boost.
Online sales alone rose 12.6 percent to $122.9 billion, topping a forecast for growth of up to 10 percent. The biggest downturn came from department stores, with a 7 percent decline.
The healthy spending was likely fueled by soaring consumer confidence, which has jumped after the election to the highest level in nearly a decade. Small businesses are also more bullish. And average hourly pay rose 2.9 percent in December from a year earlier.
An H&M store window advertises a sale in New York. Excluding autos and gasoline, retail sales overall were flat in December.