Economists spent the end of 2012 fretting about looming spending cuts and tax increases. Consumers, however, spent it shopping.
Retail sales across the nation rose 0.5 percent to $415.7 billion in December as Americans put fiscal cliff worries on the back burner and went on holiday buying sprees, according to the Commerce Department.
The increase was the second since November’s 0.4 percent bump.
“The fiscal cliff debate weakened confidence more than it weakened actual spending as December sales finished the year in decent fashion,” Credit Suisse analysts wrote in a report Tuesday.
Discretionary demand for autos, apparel, furniture and restaurants is “solid,” the analysts said. Consumer spending drives the majority of the economy.
From November to December, motor vehicle dealers enjoyed a 1.8 percent bump, while clothes sellers saw sales jump 1 percent. Sales at restaurants and bars swelled 1.2 percent.
Electronics retailers, such as beleaguered Best Buy, dipped 0.6 percent.
Over all of 2012, retail sales have boomed 5.2 percent, according to the Commerce Department – though the growth is smaller than the previous year’s 7.9 percent surge.
Also on Tuesday, the Labor Department released data showing wholesale prices taking their third monthly dive in December. The so-called producer price index slipped 0.2 percent last month after a 0.8 percent slide in November.
The slide was largely due to a 0.9 percent decline in prices for finished consumer foods – the first since May and driven heavily by a 4.8 percent drop in beef and veal prices. Lower prices for vegetables and cheese also contributed.