ARLINGTON, Va.—Total retail sales rose 0.3% in December – the third consecutive month to see a rise.
"The holiday season was expected to be modest, but these are promising numbers," said NAFCU Chief Economist and Vice President of Research Curt Long. "Continued economic expansion will drive moderate retail sales in 2020, with the potential for better wage growth in a tight labor market serving as a notable risk."
Year-over-year growth in retail sales was 5.8% in December, up from 3.3% in November. Control group sales increased 6.4% from a year ago.
Results among the major retail segments were mostly positive in December, with vehicle and parts and department stores seeing declines, Long said.
Beige Book Data Released
Separately, the Fed reported economy expanded modestly in the final weeks of 2019, which was likely supported by "solid" holiday shopping, according to the latest Beige Book data, which further highlighted the importance of online shopping during this time.
"The Fed's summary of anecdotal accounts from business contacts indicates that the economy is still on solid footing," said Long. "Reports of a strong holiday shopping season are welcome and reflect high levels of consumer confidence."
According to the Fed, home sales were flat overall and varied widely across the districts though residential rental markets strengthened. Inventory constraints continue to be cited as a reason for low home sales, but residential construction expanded modestly in the final six weeks of the year.
In terms of prices, the Fed reported a modest pace of growth. A few districts noted "some businesses were passing along tariff costs to consumers – mostly in retail but also in construction," and that restaurants were also affected by higher food prices.
Other Notes From Beige Book
Long noted other highlights from this month's Beige Book:
- Vehicle sales generally expanded moderately, though a handful of districts reported flat sales
- Banks mostly characterized loan volume as steady to expanding moderately
- Employment was steady to rising modestly in most districts, while labor markets remained tight throughout the nation
- Most districts cited widespread labor shortages as a factor constraining job growth, and, in a few cases, business expansion