US Retail Sales Grow at Slower Pace in December
US retail sales increased by 0.4% in December, a slower-than-expected month-on-month rate. The growth rate decelerated from an upwardly revised pace of 0.8% in November, according to the Commerce Department. Economists had predicted a 0.6% increase.
Spending at automotive dealerships eased, and expenditures on building material and garden equipment store sales fell by 2%. However, receipts of sporting goods, hobby, musical instrument and book stores jumped during the key pre-Christmas shopping season.
Despite the slower growth rate, analysts at Capital Economics believe the retail sales figure is still strong enough to boost their expectations for fourth-quarter growth. The number also represents a strong handover to the first quarter, when consumption growth is expected to slow only modestly.
In other economic news, the number of Americans filing for unemployment benefits ticked up by more than expected to 217,000 in the week ending January 11. The four-week moving average of jobless claims decreased by 750 to 212,750.
The Philadelphia Federal Reserve’s manufacturing index came in at 44.3 in January, far above the prior month’s level of negative 10.9 and forecasts of negative 5.0. The reading indicates an expansion in manufacturing activity and is the highest since April 2021.
Analysts at Vital Knowledge argue that while the deluge of numbers do not shift the narrative a ton around the Federal Reserve’s interest rate policy outlook this year, the takeaway is hawkish. Investors have been eyeing data this week to assess how the Fed may approach further potential cuts this year.
