U.S. shoppers kept on buying in December but at a slower pace, as retail sales posted a smaller-than-expected gain in the last month of the holiday season, a Commerce Department report on Thursday said.
The department said retail sales rose 0.5 percent in December to $325.04 billion, less than half the revised 1.2 percent gain in November. Purchases excluding autos eked out a smaller 0.1 percent increase in December, after a 0.7 percent rise in the previous month.
The numbers were weaker than economists had anticipated. Analysts polled by Reuters had projected a 0.9 percent increase in overall sales and a 0.4 percent advance in non-auto purchases.
Retail sales make up a major portion of total consumer spending, which drives about two-thirds of the U.S. economy. The December figures may raise concerns that consumer spending, which had been aided by low interest rates and income tax cuts in 2003, may have lost some momentum at the year's end.
In December, auto sales rose 1.6 percent after a 3.0 percent gain in November. Nonstore retailers, which include catalog and Internet sellers, posted a 2.1 percent gain, while most other categories saw modest gains or outright declines.