December retail sales released on Wednesday showed that US consumer spending continued to show strengthening in 2023, indirectly putting to rest fears that economic growth stalled in the final months of the year.
Based on Census Bureau data, retail sales increased by 0.6% in December. Economists had expected an increase of 0.4%. Retail sales in November showed a surprising increase of 0.3%.
December sales that exclude vehicles and gas rose 0.6% compared with estimates of a 0.3% increase analyzed by Bloomberg.
Of the 13 categories highlighted in this report, nine of them showed an increase compared to the previous month. Sales of clothing and clothing accessories and merchants without stores increased by 1.5%. Meanwhile, sales at health and personal care stores declined 1.4%, while sales at gas stations declined 1.3%.
The December report was closely watched by investors for signs of a "soft landing" in the US economy, where inflation slowed to the Fed's 2% target rate without an extreme economic downturn.
Fed Chairman Jerome Powell said last month that strong economic growth was "not the problem" in the central bank's fight against inflation, noting in December it was only a dilemma if "it makes achieving our goals difficult".
Meanwhile, inflation increased more than expected in December. Consumer prices rose by 3.4% year-on-year in December, up from a 3.1% increase in November.
