Recovery prompts US retail sales boom - best since 1999

SIX consecutive months of American economic growth has resulted in a 2010 year-on-year increase of 6.7 per cent in retail sales - the biggest surge since 1999, according to US Commerce Department statistics.

Core inflation rates, excluding volatile food and fuel, rose 0.1 per cent for a second month. That held last year's increase to 0.8 per cent, the smallest annual gain since 1958 when records began.

US retail volume increased 0.6 per cent in December to US$381 billion, a level 13.5 per cent above the recession low point in December 2008, the Commerce Department said.

The robust sales figures are a sign that economic recovery is in full swing, said Newark's Journal of Commerce, noting that consumer spending accounts for 70 per cent of US economic activity and is a main driver of freight volume.

Pre-holiday, November-December sales, increased 5.7 per cent to $462 billion, according to the National Retail Federation, which doesn't count restaurant, car and car-related sales. Those figured topped the Neff's early forecast of a 3.3 per cent increase, making it the biggest holiday surge since 2004, when sales hit 5.9 per cent.

"While the worst appears to be behind us, we are not out of the woods yet," said NRF economist Jack Kleinhenz. "This latest step-up in growth is a spark for increased business spending and hiring."

Eight of 13 big store categories increased last month, led by a 2.6 per cent rise at non-store retailers, which include Internet sales. Other December increases included sales from stores selling building materials, up 2 per cent; gas stations, up 1.6 per cent; health and personal care stores, up 1.6 per cent, car sales, up 1.1 per cent and furniture sellers, up one per cent. But department store sales declined 1.9 per cent after a 2.8 per cent increase in November, said the Commerce Department.

The US Labour Department said the cost of living climbed 0.5 per cent in December, led by higher fuel and food prices. For all of 2010, it rose 1.5 per cent against 2.7 per cent the year before.

Manufacturing output grew 0.4 per cent, and utility output increased 4.3 per cent, as unusually cold weather boosted demand for heating.

Factory output, excluding motor vehicles, rose 0.5 per cent in December. Automakers decreased output by 0.2 per cent as companies sought to keep inventories down.

The operating rate for factories increased to 73.2 per cent from a revised 72.9 per cent in November but still was below its 1972-2009 average of 79.2 per cent. Including mining and utilities, capacity utilisation rose to 76 per cent from 74.5 per cent.
(Source:www.schednet.com)