US Retail Sales
Retail sales in the U.S. rose in July for the first time in four months and topped economists’ forecast. REUTERS

Retail sales in the U.S. topped economists' forecast in December as Americans shrugged off the threat of deep spending cuts and tax increases and bought cars and a range of other goods. The increase in sales was the highest since September, suggesting that the world's No. 1 economy ended the year with more of a bang than a whimper.

The Commerce Department announced on Tuesday that retail sales rose 0.5 percent after an upwardly revised 0.4 percent rise in November. Sales in November were previously reported to have gained 0.3 percent.

Economists polled by Reuters had expected sales to increase only 0.2 percent overall and 0.3 percent minus autos, gasoline and building materials. The so-called core sales increased 0.6 percent after advancing 0.5 percent in November.

Sales of motor vehicles and parts increased 1.6 percent in December. Sales at home-furnishing stores rose 1.4 percent and sales at bars and restaurants rose 1.2 percent. Sales fell 1.6 percent at gas stations -- a good thing for consumers -- as fuel prices retreated for a third straight month

Total sales were up 4.7 percent from December 2011, and they rose 5.2 percent for the whole of 2012.

“The apparent strength of U.S. retail sales growth over the final few months of last year suggests that the looming fiscal cliff, including the risk of higher taxes, did little to deter consumers over the holiday shopping season,” Paul Ashworth, chief U.S. economist for Capital Economics, said.

“Excluding gasoline, motor vehicles and building materials, core sales increased by an encouraging 0.6 percent month over month in December after a 0.5 percent gain in November. As a result, it now looks like fourth-quarter real consumption growth accelerated to roughly 2.4 percent annualized, from 1.6 percent in the third. Fourth-quarter GDP growth was probably now 1.5 percent, a little higher than we previously thought.”