The U.S. Census Bureau today confirmed that holiday sales beat all expectations.
According to government numbers, December retail sales increased by 5.6% over December 2016. Non-store sales, which includes online sales, grew in December by 12.7% over the prior year period.
All key retail sectors except sporting goods saw increases during the month, according to government records. Those categories related to home fared best, with building materials and supplies stores and furniture and furnishings retailers seeing a 9.9% bounce. Clothing and accessories managed a 2.4% increase.
The National Retail Federation today announced that sales made during from Nov. 1 to Dec. 31 increased by 5.5% over 2016. Retail sales, excluding expenditures on restaurants, cars and gas, hit $691.9 billion. Online purchases and other non-store sales reached $138.4 billion, an 11.5% improvement over the previous year. These results mark the biggest increase since 2010 when sales grew by 5.2% following the recession.
Early results for the season from Mastercard SpendingPulse, which tracked spending through Dec. 24, reported holiday sales grew by 4.9%. The NRF had forecast a strong season but it only anticipated sales growth of 3.6 and 4 percent.
“We knew going in that retailers were going to have a good holiday season but the results are even better than anything we could have hoped for, especially given the misleading headlines of the past year,” NRF President and CEO Matthew Shay said.
Throughout the season, NRF said clothing and accessories sales saw a 2.7 percent uptick year-over-year.
Business information provider IHS Markit noted that though 2017 was the strongest holiday since 2005, when it came to brick-and-mortar sales, some sectors lost steam as Christmas approached. The firm said department stores, clothing and electronics were among those that posted negative results as the year drew to a close.
Overall though, the IHS said the holiday sales lifts its outlook for the fourth quarter. “Today’s strong report raised our estimate of Q4 GDP growth three-tenths to 2.6% (revised up further to 2.7% after folding in this morning’s CPI report) and our forecast of Q1 GDP growth two-tenths to 2.4%.”
The NRF credited the sales numbers to the 17-year low unemployment, increase in income, strong consumer confidence and the healthy stock market for shoppers’ willingness to open their wallets. The group also credit the tax cuts for giving consumers more leeway in their budgets.
“The economy was in great shape going into the holiday season, and retailers had the right mix of inventory, pricing and staffing to help them connect with shoppers very efficiently,” said NRF Chief Economist Jack Kleinhenz.
These factors along with recent legislation have the NRF bullish on 2018.
“With this as a starting point and tax cuts putting more money into consumers’ pockets, we are confident that retailers will have a very good year ahead,” Shay added.