Online retailers reported a strong sales gain of 1.2 percent. "We've seen the labor market has been rather solid", said Satyam Panday, senior economist at S&P Global.
December retail sales - a measure of consumer spending at stores, restaurants and websites - rose 4.2 percent, the most in three years, the Commerce report concluded, while e-commerce sales rose 1.2 percent from November and 12.7 percent from the prior December. Consumer spending, which makes up for over two-thirds of USA economic activity, increased at a 2.2 percent annualized rate for the third quarter.
Excluding sales of automobiles, which rose by 0.2% to reach $102.06bn, retail sales were 0.4% ahead versus the previous month, which was in-line with economists' forecasts.
"We aren't sure who gets the credit for the strongest advance in consumer spending since 2010, but it is likely tied in part to the massive tax cuts from Washington and perhaps the Fed's easy money too-low interest rate policy for this stage of the business cycle with the economy in its ninth year of expansion from the end of the recession", said Chris Rupkey, chief financial economist at MUFG Union Bank in NY, in a note to clients Friday.
Spending Surge U.S. retail sales grew for a ninth straight holiday season in 2017 Source National Retail Federation
GlobalData Retail managing director Neil Saunders cited these factors: Consumer confidence at 17-year highs, steady wage growth of about 3 percent, the booming stock market, and the robust housing sector.
As a result, certain retail segments were particularly strong in December. "Our consumer data showed that small home-related items like decor and accessories were one of the most popular gifting categories this holiday season". Total sales for the October 2017 through December 2017 period were up 5.5% from the same period a year ago. It's a key gauge for the economy, which derives about two-thirds of its output from consumer spending. "Overall, though, these data are consistent with the very elevated consumer confidence numbers, and they imply that the saving rate, which is already very low, continues to decline", said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Bon-Ton Stores, like many other retailers, has faced challenges as customers shifted from brick-and-mortar and mall shopping toward online retailing, and The Wall Street Journal has reported the chain has considered a possible bankruptcy filing. Fluctuations in sales often reflect changes in gas prices, not volume.
December's retail sales growth shows "the dire predictions of the demise of retail are premature", Moody's vice president Mickey Chadha said. Sales decreased from November at electronics, clothing, and sporting goods and hobby stores.
Blue Jays, Donaldson avoid arbitration
It was a busy day for the Blue Jays, who signed five players to one-year deals to avoid arbitration. A career.277 hitter, Donaldson has hit at least 29 home runs in each of the last four seasons.