US retail sales up 0.6 percent

Associated Press

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, following 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.

Some economists were disappointed by that figure and 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 multi-year 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.

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 Americans’ paychecks are getting fatter: Average hourly pay rose 2.9 percent in December from a year earlier, the most in seven years.

Earlier this month, automakers reported that sales reached a record high of 17.6 million in 2016. With interest rates rising, however, many industry experts forecast that sales will plateau and possibly slip this year.