Economic Watch: Retail Spending Helps Support Growth
Retail sales in the U.S. finished 2016 on a somewhat positive note, posting the fourth straight monthly gain, according to a new Commerce Department numbers released Friday. Separate reports show improvements in spending during the holidays, business inventories, and consumer sentiment.
The 0.6% increase in retail sales from the month before is slightly less than many analysts were forecasting and follows a revised 0.2% improvement in November from October. Retail sales are important to both trucking and the overall economy because they drive a big portion of economic activity and a lot of freight.
The December level is 4.1% higher than the same time a year ago, while total retail sales for 2016 were up 3.3% from 2015. This compares to a 2.3% year-over-year bump in 2015 vs. 2014, and 4.2% in 2014 over 2013.
Helping push December’s level higher was a 2.4% jump in new auto sales, the biggest increase since April. Sales at gasoline stations improved 2.2%, due mainly to higher prices. Excluding these two areas, however, retail sales were essentially flat in December, with the weakest reading since July.
Sales at non-store retailers, which includes online outlets, moved 1.4% higher in December and advanced 11.4% in 2016 over 2015.
“The retail sales data, on balance, remains consistent with our forecast that overall consumer spending continued to grow and at a solid 2.4% [annual] pace in the fourth quarter of 2016, although that would still be down modestly from a 3% jump in the third quarter,” said Nathan Janzen, senior economist at RBC Economics. “Strong consumer spending growth is being supported by further improvement in labor markets, although increasingly reflecting stronger wage rather than employment growth as labor markets tighten and low interest rates.”
He said interest rates are expected to drift gradually higher, but likely at a modest pace. Coupled with further labor …Read the rest of this story
