Benzinga - by Piero Cingari, Benzinga Staff Writer.
Retail sales reached new heights in December 2023, defying expectations and demonstrating the strong resilience of U.S. consumer demand.
The U.S. Census Bureau’s latest advanced estimate revealed that retail and food services sales in December amounted to $709.9 billion.
Key Highlights: In December 2023, retail sales showed a 0.6% increase from the previous month and a remarkable 5.6% surge compared to December 2022. Surpassing economist predictions of a 0.4% monthly rise, these numbers painted a bright picture for the economic growth in the last quarter of the year.
Delving deeper into the data, when excluding auto sales, retail numbers still showed strength with a 0.4% increase from the previous month, outshining the expected 0.2% uptick. Furthermore, if we exclude gas and auto sales, retail figures remained steady with a 0.6% monthly growth rate, maintaining the same pace as November.
Notable winners in the retail sector included nonstore retailers, which saw a substantial 9.7% increase from the previous year. Food services and drinking places also thrived, boasting an impressive 11.1% year-on-year growth. Electronics and appliance stores followed suit with a strong 10.7% surge, while motor vehicle and parts dealers registered a solid 10.3% improvement from December 2022.
However, on the negative side, furniture and home furnishing stores experienced a 4.7% decline year-on-year, while gasoline stations faced a more significant setback, with a 6.6% drop in sales compared to the previous year.
Market reactions: The U.S. dollar gained ground shortly after the release of these stronger-than-expected figures, with investors expressing concerns that resilient consumer demand might delay potential rate cuts by the Federal Reserve in the future.
Notably, the Invesco DB USD Index Bullish Fund (NYSE:UUP) rose by 0.9% on the back of hawkish remarks from Fed Governor Christopher Waller. Treasury yields also climbed, with the 10-year benchmark reaching 4.10%, and the popular iShares 20+ Year Treasury Bond ETF (NYSE:TLT) closed 1.8% lower.
Futures on major U.S. stock averages traded in the red ahead of the Wall Street opening bell. Nasdaq 100 contracts saw a 0.6% dip, slightly underperforming S&P 500 futures, which were down by 0.4%.
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