January 27, 2020 – Retail sales (excluding auto sales) growth surged in December to a 6.3 percent year-over-year (YoY) rate following November’s 2.5 percent YoY gain. December’s growth looks especially strong relative to the paltry 1.2 percent growth of December 2018 during the government shutdown. Holiday sales, defined as total retail sales less sales at automotive dealers, gas stations and restaurants for the months of November and December, rose 4.1 percent YoY, matching our forecast published back in November.
A sharp rise in interest income in November helped support growth in nominal personal disposable income of 4.6 percent (YoY), a slight acceleration from October’s 4.3 percent pace. Nominal consumer spending rose 3.9 percent in November as durable goods purchases rose 1 percent on a month-over-month basis. Real consumer spending grew 2.4 percent on a three-month annualized basis in November.
Solid holiday spending combined with continued job gains and modest income growth suggest consumer spending ended 2019 with good momentum. New record highs in the equity market are supporting both income growth and consumer confidence." — Michael Brown, Principal U.S. Economist at Visa
Job growth finished 2019 very solid even in light of the low unemployment rate at the start of the year. The state of the economy for consumers remains strong thanks to stable prices and low unemployment, which has made consumers very confident. — Travis Clark, U.S. Assoc. Economist at Visa