U.S. retail sales closed out 2024 with a modest increase of 0.4%, following an upwardly revised gain of 0.8% in November, according to the Census Bureau’s report on Thursday. Economists surveyed by Reuters and Bloomberg had predicted a slightly higher rise of 0.6% for December.
Total sales for the month reached $729.2 billion, marking a year-over-year growth rate of 3%. This brings the annual growth rate for all of 2024 to be at a steady pace of 3%.
While overall retail sales may have fallen short compared to economists’ expectations, there was some positive news within specific categories known as the “control group.” This group excludes volatile sectors such as auto and building material sales and showed an increase of 0.7%, surpassing consensus forecasts.
The strong employment report from December coupled with these better-than-expected retail numbers has led some economists to revise their estimates for fourth-quarter GDP upward and question whether further interest rate cuts by the Federal Reserve are necessary.
According to Carl Weinberg, chief economist at High Frequency Economics who spoke with Reuters: “Based on this latest data on retail sales, it is difficult to argue that there is any immediate need for monetary stimulus from the Fed… With full employment already achieved in our economy, there is no push needed from monetary policy.”
