retail sales
A customer counts her money while waiting in line to check out at a Target store. REUTERS/Jessica Rinaldi

U.S. retail sales last month rose more than expected as gasoline sales offset declining car and building-materials sales.

Retail and food services sales climbed to $431.9 billion, an increase of 0.2 percent from the previous month and a 4.1 percent gain over December 2012, the Commerce Department said Tuesday. Sales rose 4.6 percent year over year.

Gasoline sales rose by 1.6 percent, month over month, while auto sales declined by 1.8 percent and building-materials sales slipped by 0.4 percent.

“Overall, this report supports our view that a 4 percent annualized rise in real consumption will help to generate a decent 3 percent gain in overall (gross domestic product) in the fourth quarter of last year,” said Paul Dales, senior U.S. economist for London-based Capital Economics.

“That would provide a good platform for this year.”

In addition, furniture sales declined by 0.4 percent while electronic sales fell by 2.5 percent for a second consecutive month. But the drop was mitigated by a second strong 1.4 percent rise in online sales.

During the winter months, which were characterized by heavy promotions and last-minute deals, leisure goods fell by 0.6 percent, but a 1.8 percent rise in clothing sales offset the loss as people bought cold-weather gear.

“Weather aside, if we’re right in thinking that the underlying trend in jobs growth is still improving, households will continue to spend more freely in 2014,” Dales said.

The upturn Dales expects began several months ago.

“Retail sales have been volatile all year and the holiday shopping season was no exception,” Jack Kleinhenz, chief economist for the National Retail Federation, the world's largest retail trade group, said.

“Solid job growth in the months of October and November led to a more-confident consumer and healthy holiday shopping season for many retailers. While economic and policy uncertainties remain, the economy seems set for steady growth in the New Year,” said Kleinhenz. “Undoubtedly, some of the increase came at the expense of margin. Retailers are still stressed and a long-term promotional environment may actually hurt the bottom line. As consumer confidence grows, there will be less need for retailers to heavily promote and discount their offerings.”