Retail sales up 0.6% as strong job marked helped to fuel a strong holiday sales season

Americans stepped up their spending in December more than expected, closing out the holiday season and the year on an upbeat tone

Americans stepped up their spending even more than expected in December, closing out the holiday season and the year on an upbeat tone.

Retail sales rose 0.6% in December compared with November's 0.3% increase, according to the Commerce Department.

Sales at stores selling general merchandise rose 1.3%, while sellers of clothing and accessories saw business up 1.5%. Online sellers posted a 1.5% uptick. Furniture and home furnishings businesses had a 1% decline, reflecting a challenging housing market.

Economists had expected consumers to pull back on spending in the final three months of the year as credit card debt and delinquencies rise and savings fall. While consumers continue to face higher borrowing costs, tighter credit conditions and higher prices, spending is being fueled by a strong job market and rising wages.

Inflation has cooled significantly since peaking at 9.1% in mid-2022, but costs can still flare. Higher energy and housing prices boosted overall U.S. inflation in December, a sign that the Federal Reserve’s drive to slow inflation to its 2% target will likely remain a bumpy one.

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AP Economics writer Paul Wiseman in Washington contributed to this report.