Overall U.S. retail spending rose slightly in December, reflecting weak spending during the year-end holidays, but core retail spending rose more than expected, suggesting the economy gained momentum at the end of last year and was set for stronger growth in 2014.
The Commerce Department reported Tuesday that retail sales rose 0.2 percent last month, following stronger gains in November and October that were fueled by healthy auto sales.
In December, auto sales fell 1.8 percent, offsetting a similar increase at gasoline stations, largely driven by rising fuel prices. So-called core retail sales - which exclude autos, gasoline, building materials, and food services - increased 0.7 percent last month, a significant improvement over the 0.2 percent gain in November.
The increase in core sales suggested consumer spending - which accounts for 70 percent of U.S. economic activity - accelerated in the fourth quarter of 2013. Core sales were lifted by a 1.8 percent jump at clothing stores, while sales at food and beverage stores recorded their largest increase in seven years.
However, traditional holiday spending was disappointing. Americans spent less on furniture and electronics, and sales at department stores fell 0.7 percent in December and 3.3 percent for the year. In 2013, retail sales rose 4.2 percent, the weakest in four years.