Last-minute spending lifts shopping season

A jump in consumer spending in the final stretch of December significantly offset a slow start to the U.S. holiday shopping season, and is likely to help many retailers beat sales forecasts, industry research groups said.

The December spending boost is in contrast to a muted November, when early holiday promotions and expectations among consumers that deals would always be available took a toll. Spending over the Thanksgiving weekend in November fell 3.5 percent from a year ago despite a strong jump in online sales, according to the National Retail Federation.

'It was a hot start with Cyber Monday, followed by a lull for the last couple of weeks and then a big-bang finish,” said Pete Madden, a director at retail consultancy AlixPartners.

Sales data released on Tuesday showed the major shift in fortunes in late December

Brick-and-mortar sales in the week ending Dec. 24 rose 6.5 percent year-over-year after having fallen for the rest of the month, according to data from analytics firm RetailNext.

Strong demand for furniture, home furnishings and men's apparel from the start of November through Christmas Eve pushed U.S. retail sales up 4 percent, higher than the previously expected 3.8 percent, according to data from MasterCard's holiday spending report, also released on Tuesday.

The report, which tracks spending by combining sales activity in MasterCard's payments network with estimates of cash and other payment forms, offers an early look into how the holiday season shaped up. Official government data and results from retailers will not be available until next month.

The jump in spending prompted a prominent retail consultant to raise his holiday sales forecast. Craig Johnson, president of consultancy Customer Growth Partners, told Reuters that he now estimates sales growth of 4.9 percent in November and December, up from his initial estimate of 4.1 percent.

There is growing evidence that an improving job market, lower gasoline prices and growing consumer optimism all contributed to the surge.