Michael Pearce, lead U.S. economist at Oxford Economics, said the latest retail data showed department stores and online retailers helped to round out a “solid holiday shopping season.” While spending at restaurants and bars was strong in December, he said growth has leveled off in recent months and remains relatively muted when adjusting total sales for inflation.
Pearce noted in a statement that clothing stores were also among those posting strong increases in December as overall sales gains were offset slightly by weakness in housing-related categories such as furniture, electronics and building materials.
National Retail Federation Chief Economist Jack Kleinhenz said consumer spending was “remarkably resilient” throughout 2023. “Although inflation has been the biggest concern for households, the price of goods eased notably and was helped by a healthy labor market, underscoring a successful holiday season for retailers,” Kleinhenz said in a Wednesday statement from the trade group.
Residential Builder Confidence Surges
Builders of single-family homes are feeling better about their business prospects as falling interest rates help to make housing potentially more affordable, according to the latest monthly gauge of industry sentiment by the National Association of Home Builders and Wells Fargo.
The trade group’s January confidence index found 44% of survey respondents generally viewing market conditions as favorable, seven points higher than shown in the December survey. This marked the second consecutive monthly increase in sentiment, tracking closely with a recent decline in interest rates among other factors making developers more optimistic.