Americans were willing to spend this holiday season, resulting in solid sales gains in December for traditional and online retailers, the Commerce Department reported Friday.
Holiday sales from November 1 through December 31 rose 5.5 percent over the same period in 2016, to $691.9 billion.
Sales of furniture grew by 0.7% to $10.33bn, while those of building materials increased by 1.2% to hit $32.98bn.
December alone was up 0.4% seasonally adjusted from November and up 4.6% unadjusted year-over-year.
Sales rose 5.5% last November and December compared to the previous year.
U.S. Federal Reserve officials expected consumer spending will continue moderate growth in the near term, underpinned by the strength of the labor market, further improvements in household net worth, and buoyant consumer sentiment, according to minutes of Fed's policy meeting in December past year.
Shepherdson also pointed out the sharp 0.4% net upward revision to non-automobile sales for October and November, which he expected would trigger upward revisions to estimates of household consumption for the final three months of 2017.
Shortly after the start of trading, the Commerce Department is scheduled to release its report on business inventories in the month of November.
Online retailers reported a strong sales gain of 1.2 percent.
"The improving labor market, robust consumer confidence and the imminent boost to disposable incomes from the recently-enacted tax cuts suggest that spending will continue to grow at a healthy pace over the first half of this year", said Andrew Hunter, an economist at Capital Economics. Sales last month were supported by a 1.2 percent jump in receipts at gardening and building material stores.
Clothing and accessories stores increased 2.7% unadjusted year-over-year. Sales in restaurants and bars rose 0.7 percent, while department and general merchandise stores saw a more modest rise of 0.1 percent.
Another key indicator, the U.S. Labor Department's consumer price index, rose 0.3%, the government said Friday. "With this as a starting point and tax cuts putting more money into consumers' pockets, we are confident that retailers will have a very good year ahead".
Its analysis released Wednesday showed that overall spending among Philly shoppers in stores grew 4 percent this last holiday season from previous year.
Retail spending represents 35 percent of all spending in Philly, and grew 3.7 percent during the holiday season.
For decades, the holiday season has been a critical time for the nation's retailers, and analysts said that was particularly true in 2017.
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