WASHINGTON (Reuters) - U.S. retail sales increased in more than expected in November amid an acceleration in motor vehicle purchases, consistent with strong underlying momentum in the economy as the year winds down.

Retail sales jumped 0.7% last month after an upwardly revised 0.5% gain in October, the Commerce Department's Census Bureau said on Tuesday.

Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, advancing 0.5% after a previously reported 0.4% rise in October.

Estimates ranged from a 0.1% dip to a 1.0% jump. Labor market resilience, characterized by historically low layoffs and strong wage growth, is underpinning consumer spending and keeping the economic expansion on track.

Strong household balance sheets, reflecting record stock market prices and high home prices, are also driving spending.

Household savings remain supportive.

The solid increase in retail sales came despite a late Thanksgiving holiday that pushed Cyber Monday into December, and was consistent with a strong start to the holiday shopping season. It was also in spite of a less favorable seasonal factor, the model that the government uses to strip seasonal fluctuations from the data.

Federal Reserve officials were due to start a two-day policy meeting on Tuesday and were expected to cut interest rates by 25 basis points on Wednesday, the third reduction in borrowing costs since the U.S. central bank embarked on its easing cycle in September.

Strong retail sales added to warmer inflation readings in recent months in suggesting that the Fed could pause rate cuts in January. President-elect Donald Trump's incoming administration's planned policies, including tariffs on imports and mass deportations of undocumented immigrants, are also seen complicating matters for the central bank.

"Sticky, above-target inflation will weigh on the Fed's decisions next year," said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics.

"But with tariffs set to squeeze real after-tax incomes and undermine confidence, we think the Committee will be more worried initially about the labor market."

The U.S. central bank's benchmark overnight interest rate is currently in the 4.50%-4.75% range, having been hiked by 5.25 percentage points between March 2022 and July 2023.

Retail sales excluding automobiles, gasoline, building materials and food services rose 0.4% last month after an unrevised 0.1% dip in October. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product.

Consumer spending grew at a 3.5% annualized rate in the third quarter, accounting for most of the economy's 2.8% pace of expansion during that period. The Atlanta Fed is currently forecasting GDP increasing at a 3.3% pace in the fourth quarter.