U.S. household spending has continued to register robust increases through December, driven by online purchases, building materials and garden equipment. According to the latest advance U.S. retail sales numbers released by the U.S. Census Bureau, retail sales increased by 0.4% for the month. The increase is below the expected figure of +0.5% and lower than November’s figure of +0.9%. On a yearly basis, the increase was 5.2%, down from November’s comparable figure of 5.7% (after revisions).
Despite missing market expectations, ANZ economist Daniel Gradwell said the sales figures, along with revisions to previous months, highlighted “the strength of private consumption.” U.S. bond yields finished the day higher. 2 year yields increased by 4bps to 2.00% but 10 year yields increased by 1bp to 2.55%. The U.S. dollar was weaker against all other major currencies.
In dollar terms, nearly 40% of the month’s increase was attributable to “non-store retailers”. While non-store retailers may include direct selling and other forms of electronic commerce, online transactions sales accounts for the bulk of this segment.