The Department of Commerce said that retail spending rose in December at the fastest pace in three months. Overall sales were up 0.6 percent, easily topping Wall Street's estimate for a 0.4 percent increase and double the already surprisingly strong gain of 0.3 percent in November. Compared with a year ago, sales were up 5.6 percent.

Excluding auto dealers and gas stations, retail sales were also up 0.6 percent. Auto sales were strong, rising 1.1 percent, but gas station sales fell, reflecting a 19-cent decline in gasoline prices.

There's no doubt that holiday shopping was a big boost. Sales at department stores soared three percent for the month, and online sales jumped 1.5 percent. Sales at the category that includes sporting goods stores, hobby stores, and bookstores rose 0.3 percent.