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US May retail sales beat expectations; point to strong demand
[WASHINGTON] US retail sales rose more than expected in May as Americans bought automobiles and a range of other goods, suggesting economic growth was gaining steam despite a sharp slowdown in job creation.
The Commerce Department said on Tuesday retail sales increased 0.5 per cent last month after surging by an unrevised 1.3 per cent in April. It was the second straight month of gains and lifted sales 2.5 per cent from a year ago.
Excluding automobiles, gasoline, building materials and food services, retail sales rose a solid 0.4 per cent last month after an upwardly revised 1.0 per cent increase in April.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have risen 0.9 per cent in April. Economists polled by Reuters had forecast both overall retail and core sales gaining 0.3 per cent last month.
The fairly strong May retail sales report could see economists raising their second-quarter GDP growth estimates, which are currently around a 2.5 per cent annualized rate. The economy grew at a 0.8 per cent rate in the first quarter.
Tepid employment gains in May stirred concerns about the health of the economy. But so far, data on first-time applications for unemployment benefits suggests labor market strength remains intact.
In May, auto sales rose 0.5 per cent after racing 3.1 per cent in April. Receipts at service stations increased 2.1 per cent, reflecting recent increases in gasoline prices.
Sales at clothing stores increased 0.8 per cent, the largest gain since November. Online retail sales shot up 1.3 per cent. Receipts at sporting goods and hobby stores jumped 1.3 per cent last month. Restaurants and bars sales climbed 0.8 per cent.
Sales at electronics and appliance outlets gained 0.3 per cent. But sales at building materials and garden equipment stores fell 1.8 per cent after declining 2.0 per cent in April. Furniture store sales dipped 0.1 per cent.