12:28 PM EST, 01/16/2025 (MT Newswires) -- US retail sales rose at a slower-than-projected pace last month, weighed down by a decline in the volatile building materials stores component, data from the Census Bureau showed Thursday.

Sales increased 0.4% in December, trailing the Bloomberg-polled consensus for a 0.6% gain. November's growth rate was revised higher to 0.8% from 0.7%. Annually, retail sales were up 3.9% last month, according to the report.

"The US consumer put in a very strong performance in the fourth quarter, even as overall retail sales slowed a touch in December," BMO Chief US Economist Scott Anderson said.

Spending on motor vehicles and parts rose 0.7% sequentially in December, while outlays at gas stations moved 1.5% higher, official data showed. Retail sales without the two components were up 0.3%, compared with views for a 0.4% increase.

Spending on building materials and garden equipment fell 2%.

"Pushing down overall retail sales was a large and unexpected 2% decline at building materials stores where sales are volatile," according to Anderson. "That drop alone subtracted more than a tenth of a percentage point off of overall retail sales last month."

Retail sales at electronics and clothing stores gained, while healthcare and personal care stores and eating and drinking places logged declines.

"It has been a very strong performance from the consumer and retail sales since the (Federal Reserve) started cutting interest rates in September," Anderson said. "Strong fourth-quarter retail sales growth is another data point the Fed will use to justify holding the Fed funds target rate steady on January 29th as it awaits more clarity on tariffs and the future path of inflation."