US retail industry sales gather momentum through December

Sales within the US retail industry rose in December by more than analysts had expected as Americans spent more on cars and home furnishings, figures show.

American consumers drove a bigger than expected increase in retail sales in the run-up to Christmas, shrugging off the threat of tax rises as politicians failed to agree to measures to avert the so-called "fiscal cliff".

Sales rose 0.5pc to $415.7 billion in December according to the US Commerce Department, boosted by the sale of cars and home furnishings. The increase beat economists' expectations of a 0.2pc rise, and was a slight improvement on the 0.4pc increase in November.

With consumer spending accounting for about 70% of US economic activity, analysts said the figures were good news for the economy. Sales of cars and car parts rose by 1.6% from November, while sales of furniture and personal care products were 1.4% higher.

Economists said the data were encouraging for fourth-quarter growth, the data for which has yet to be published, and for the consumer environment in 2013.

Economists at Capital Economics said that while the US economy was likely to grow by just 2pc this year, "the foundations for faster growth in a few years' time are falling into place."

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