US stores started their Christmas sales earlier than usual Friday, January 14, 2011
US retail sales rise in December
US stores started their Christmas sales earlier than usual US retail sales rose in December for the fifth consecutive month, driven by holiday season demand, official figures have suggested.
Sales grew by 0.6% last month compared with November, according to the US Commerce Department.
The increase lifted the annual sales total up 6.7%, the largest annual increase since 1999.
Meanwhile, the Labor Department said December consumer prices rose by 0.5%, the largest increase in 18 months.
About 80% of the increase was due to an 8.5% rises in petrol prices. Core inflation, which strips out volatile fuel and food rises, was up just 0.1% in December.
Those rising fuel prices helped drive down the University of Michigan Consumer sentiment index, also released on Friday.
The survey' s preliminary January reading on the overall consumer sentiment slipped to 72.7, down from 74.5 in December.
Consumer spending is important as it accounts for about 70% of economic activity in the US. Retail sales, excluding car sales, were up 0.5% in the month.
Michael Woolfolk BNY Mellon“CPI is a bit hotter than expected but on a core CPI basis, it's still very low”
Although the retail sales figure rose again, to $381bn (£240bn) it was less than analysts had been expecting.
December's gains were smaller than in the previous two months, as retailers began sales earlier and parts of the country were hit by bad weather which prevented shoppers visiting stores.
"Certainly retail sales is a modest disappointment," said Michael Woolfolk at BNY Mellon.
Consumer Price Inflation (CPI) was "a bit hotter than expected but on a core CPI basis, it's still very low," he added.
Meanwhile, the Federal Reserve said US industrial production rose 0.8%, the biggest increase in five months.
The biggest slice of industrial production, factory output, rose by 0.4%, the sixth straight increase.
"Manufacturing looks like it is doing its job and moving the economy ahead," said John Silvia, chief economist at Wells Fargo.
The figures come two days after the Federal Reserve said the US economy was continuing to grow moderately, but suffering from high unemployment.
Other data released earlier this week showed US wholesale prices saw their biggest increase in 11 months in December, led by higher energy and food costs.
Separate figures showed banks repossessed a record one million US homes in 2010, but despite the housing data, the US economy appears to have ended the year on an encouraging note.
However some economists are warning of a tricky year ahead.
"At the end of the day, the US economy still faces challenges and the US consumer is still overburdened with debt, so he's not spending or really all that optimistic," said Kathy Lien at GFT Forex in New York.
After the release of the various figures on Friday the Dow Jones index was flat, being largely unchanged.
This article is from the BBC News website. � British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.
Source: http://www.bbc.co.uk/go/rss/int/news/-/news/business-12194727
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