U.S. retail sales rose for the sixth consecutive month in December, capping a year in which sales grew at the fastest rate since 1999, the Commerce Department said.
The robust sales figures are a sign the economic recovery is in full swing. Consumer spending accounts for 70 percent of U.S. economic activity and is a main driver of freight volume.
Retail sales rose 0.6 percent last month to $381 billion, a level 13.5 percent above the recession low hit in December 2008, the Commerce Department said.
By The Numbers: U.S. Retail Inventory to Sales Ratio.
For the full year, retail sales increased 6.7 percent from the recession levels of 2009. It was the largest annual increase since 8.2 percent in 1999.
Preliminary 2010 holiday sales, which combine the full months of November and December, rose 5.7 percent to $462 billion, according to the National Retail Federation, which doesn’t count automobiles, gas stations, and restaurants. That total surpassed NRF's forecast of 3.3 percent for the best holiday sales gain since 2004, when holiday sales increased 5.9 percent.
“In spite of weakness in employment and rising gas prices, consumers showed they still have spending power which helped retailers when it counted most,” said NRF President and CEO Matthew Shay. “Retailers did a tremendous job planning for the season by managing inventory and hitting the right price points that helped them tap into pent up demand.”
“While the worst appears to be behind us, we are not out of the woods yet,” said NRF Chief Economist Jack Kleinhenz. “This latest step-up in growth is a spark for increased business spending and hiring.”
Eight of 13 major categories showed increases last month, led by a 2.6 percent jump at non-store retailers, which include Internet sales. Other increases during December were building materials retailers, 2 percent; gasoline stations, 1.6 percent; health and personal care stores, 1.6 percent, auto retailers, 1.1 percent and furniture stores, 1 percent.
Sales slipped an estimated 1.9 percent at department stores following a 2.8 percent increase in November, the Commerce Department said.
In a separate report Friday, the Labor Department said the cost of living climbed 0.5 percent in December, led by higher fuel and food prices. For all of 2010 it rose 1.5 percent, compared with 2.7 percent a year earlier.
The so-called core rate of inflation, which excludes volatile food and fuel costs, rose 0.1 percent for a second month. That held last year’s increase to 0.8 percent, the smallest annual gain since records began in 1958.
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