U.S. Economy Boosted by Strong Retail Sales and Employment Surge

U.S. retail sales rose in December, with strong consumer demand indicating economic growth. The Fed's prudent interest rate strategy is supported by a robust labor market and wage growth. Despite inflation concerns, economists remain optimistic about future economic performance, adjusting their growth forecasts accordingly.

In December, U.S. retail sales saw an uptick as consumers invested in motor vehicles and various other goods, signaling a robust economic demand. This development supports the Federal Reserve's cautious approach to interest rate adjustments this year.

This latest report from the Commerce Department encouraged economists to revise their growth forecasts upwards for the fourth quarter, nearing the robust economic activity seen in the previous quarter. December's surge in nonfarm payrolls and a drop in unemployment to 4.1% underscore the labor market's contribution to consumer spending through higher wages.

Retail sales figures reveal a 0.4% increase from November, suggesting sustained consumer interest. Despite some sectors like online stores and dining services experiencing modest growth, core sales remain robust. The adjustments reflect the underlying strength of consumer behavior and economic resilience.

(With inputs from agencies.)