By Lucia Mutikani
WASHINGTON (Reuters) -U.S. retail sales increased in December as households bought motor vehicles and a range of other goods, pointing to strong demand in the economy and further reinforcing the Federal Reserve’s cautious approach to cutting interest rates this year.
The report from the Commerce Department on Thursday prompted some economists to upgrade their economic growth estimates for the fourth quarter to just shy of the July-September quarter’s brisk pace. It followed news last week of a surge in nonfarm payrolls in December and a drop in the unemployment rate to 4.1% from 4.2% in November.
Though underlying inflation slowed last month, overall consumer prices increased by the most in nine months. Labor market strength is driving spending through higher wage growth.
“No one can make a case that the Fed has any urgent need to cut interest rates from this retail sales report,” said Carl Weinberg, chief…
