| Actual | Previous | Revised | |
| Month over Month | 1.0% | 0.1% | -0.1% |
| Year over Year | 2.9% | 2.3% | 1.7% |
Highlights
Retail sales rebounded in December, rising at their fastest rate since June. Consumers spent 1.0 percent more in December, seasonally adjusted, than they did in November when sales contracted 0.1 percent. From a year ago, sales rose 2.9 percent after a 1.7 percent increase in November.
Leading the monthly gain was a 4.6 percent increase for information and communication equipment, the biggest increase since April 2024. Other household goods, textiles, home repair and furniture rose 4.4 percent, an increase last seen in September 2022.
Motor fuel subtracted from growth, having fallen 0.9 percent in December from the previous month. Excluding fuel, overall retail sales were up 1.2 percent in December. The decline helped to give households more disposable income.
After increasing 1.9 percent in November, sales via stalls, markets, mail order houses and the internet fell 2.1 percent in December.
Today's data show that consumers were willing to spend, perhaps in a good mood for the Christmas holidays. The result ends the year on a positive note and could add a slight boost to fourth quarter GDP.
Definition
Retail sales measure the total receipts at stores that sell durable and nondurable goods. The survey comprises around 4,000 companies with the small-sized firms asked to provide monthly turnover data on a quarterly basis. Statistics are provided in both nominal and volume measures; the latter is the more important for financial markets. The headline figure is the annual growth in sales volumes adjusted for differences in trading days. Seasonally adjusted monthly changes are also provided. Details are limited in the first estimate but a more complete picture is provided with the following month's release.
Description
Consumer spending accounts for a large portion of the economy, so if you know what consumers are up to, you will have a pretty good idea on where the economy is headed. Needless to say, that is a big advantage for investors. The pattern in consumer spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. Retail sales not only give you a sense of the big picture, but also the trends among different types of retailers. Perhaps auto sales are especially strong or apparel sales are showing exceptional weakness. These trends from the retail sales data can help you spot specific investment opportunities, without having to wait for a company's quarterly or annual report.