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US retail sales jump in May, brighten growth outlook
[WASHINGTON] US retail sales surged in May as households boosted purchases of automobiles and a range of other goods even as they paid a bit more for gasoline, the latest sign economic growth is finally gathering steam.
The Commerce Department said on Thursday retail sales increased 1.2 per cent last month after an upwardly revised 0.2 per cent gain in April.
Economists polled by Reuters had forecast retail sales advancing 1.1 per cent last month. April sales were previously reported to have been unchanged. March sales were also revised to show them rising 1.5 per cent instead of 1.1 per cent.
Solid retail sales data added to robust job growth in May and stabilizing manufacturing activity in suggesting the economy was finding momentum after getting off to a slow start in the second quarter. That likely keeps the Federal Reserve on track to raise interest rates this year.
The government's most recent growth estimate showed gross domestic product contracted at a 0.7 per cent annual pace in the first quarter, but data on healthcare spending on Wednesday, together with revisions to construction spending, trade and wholesale inventory reports suggested output probably shrank at only a 0.1 per cent rate.
Retail sales excluding automobiles, gasoline, building materials and food services increased 0.7 per cent last month after an upwardly revised 0.1 per cent rise in April.
The so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Economists had forecast core retail sales rising 0.5 per cent in May after they were previously reported to have been flat in April.
Consumer spending is likely to remain fairly strong in the coming months, supported by high savings, rising house prices and a tightening labour market.
Overall retail sales last month were buoyed by a 2.0 per cent jump in receipts at auto dealerships. Sales at service stations rose 3.7 per cent, reflecting a rise in gasoline prices. Sales at electronic and appliance stores gained 0.1 per cent, while receipts at furniture stores increased 0.8 per cent.
Sales at clothing stores surged 1.5 per cent. Receipts at online stores climbed 1.4 per cent and sales at sporting goods stores increased 0.8 per cent. Sales of building materials and garden equipment advanced 2.1 per cent.
Sales at restaurants and bars nudged up 0.1 per cent.