Associated Press An H&M store window advertises a sale in New York. Consumer inflation slowed in December 2017 to a tiny 0.1 percent gain as the cost of energy products tumbled after a big jump in November.
Saturday, January 13, 2018 1:00 am
Holiday spending shows strength
Sales in November, December strongest combined since '05
CHRISTOPHER RUGABER | Associated Press
WASHINGTON – Ebullient U.S. consumers shopped at the healthiest pace in more than a decade during the holiday season, a sign of burgeoning economic strength.
Retail sales rose 0.4 percent in December, the Commerce Department said Friday, after a 0.9 percent surge in November. Spending for the two months combined was the best since 2005.
The strong holiday shopping figures caused economists to ramp up their estimates for economic growth in the October-December quarter. Americans are more confident about the economy and are more willing to spend. The unemployment rate is at a 17-year low of 4.1 percent.
Oxford Economics, a consulting firm, now forecasts the economy expanded at a 3.2 percent annual rate, up from 2.6 percent before the report.
If accurate, that would mean growth topped 3 percent for three straight quarters for the first time since 2005.
Healthy spending is also a good sign for the economy this year. Consumer spending accounts for about 70 percent of U.S. economic output.
“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,” Andrew Hunter, an economist at Capital Economics, said.
Retail sales rose 4.2 percent in 2017, the most in three years.