WASHINGTON — Retail sales rose more than expected in December, the Commerce Department said Tuesday, as Americans shrugged off the threat of higher taxes and bought automobiles and a range of other goods, suggesting momentum in consumer spending as the year ended.
The government said retail sales increased 0.5 percent after an upwardly revised 0.4 percent rise in November. Sales in November were previously reported to have gained 0.3 percent.
Economists polled by Reuters had expected sales to rise only 0.2 percent. Sales were up 4.7 percent from December 2011 and up 5.2 percent for the whole of 2012.
So-called core sales, which strip out automobiles, gasoline and building materials and correspond most closely with the consumer spending component of gross domestic product, increased 0.6 percent after advancing 0.5 percent in November.
The second consecutive month of gains in core sales suggested that consumer spending picked up in the fourth quarter after rising at an annual pace of 1.6 percent in the July-through-September period.
The government also said Tuesday that producer prices fell in December for the third straight month as food prices declined by the most in a year and a half.
The Labor Department said its seasonally adjusted Producer Price Index slipped 0.2 percent last month. Economists polled by Reuters had expected prices at farms, factories and refineries to drop 0.1 percent last month.
A 0.9 percent drop in food costs drove most of the December decline. Excluding volatile food and energy costs, wholesale prices rose a modest 0.1 percent, in line with analysts’ forecasts.
The modest core reading suggested that businesses were seeing little growth in price pressures and could reinforce the outlook that modest inflation would give the Federal Reserve space to continue with easy money policies aimed at propping up the economy.
The decline in overall prices brought 12-month inflation to 1.3 percent.
Retail Sales Improve; Producer Prices Fall
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Retail Sales Improve; Producer Prices Fall
