NEW YORK (AP) — Americans stepped up their spending at retailers in December, closing out the holiday shopping season and the year on an upbeat tone and signaling that people remain confident enough to keep spending freely.

Retail sales accelerated 0.6% in December from November’s 0.3% increase, the Commerce Department reported Wednesday. Because spending by consumers accounts for nearly 70% of the U.S. economy, the report suggested that shoppers will be able to keep fueling economic growth this year.

Among last month’s overall retail purchases, sales at stores that sell general merchandise rose 1.3%. Sellers of clothing and accessories reported a 1.5% increase, as did online sellers. By contrast, furniture and home furnishings businesses declined 1%, reflecting a struggling housing market. Sales at restaurants were unchanged in December.

Economists had expected consumers to pull back on spending in the final three months of the year under the weight of credit card debt and delinquencies and lower savings. Yet despite those challenges, along with higher borrowing costs, tighter credit conditions and price increases, household spending is being fueled by a strong job market and rising wages.

The healthy rise in purchasing last month also highlights an apparent contradiction at the heart of the economy: Surveys suggest that Americans feel sour about the economy overall and exasperated by the increased cost of food, rent, cars and other items over the past two years. Yet the ongoing strength of their spending speaks for itself, indicating confidence in the economy and their own finances.

Inflation has cooled significantly since peaking at 9.1% in mid-2022. But costs can still flare. Higher energy and housing prices boosted overall U.S. inflation in December, a sign that the Federal Reserve’s drive to slow inflation to its 2% target will likely remain a bumpy one.

“The U.S consumer continues to hold up well, which is a positive for the economy,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

But Tentarelli said the latest data, along with other recent signs that the economy remains solid overall, does lessen the likelihood that the Federal Reserve will cut interest rates soon.