US retail sales rise more than forecast in broad advance
Consumers ramped up spending last month despite the highest average pump prices in almost four years
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[WASHINGTON] US retail sales jumped in May in a broad-based advance, signalling resilient consumer demand despite higher oil prices.
The value of retail purchases rose 0.9 per cent after a revised 0.4 per cent increase in April, Census Bureau data showed on Wednesday (Jun 17). The figures aren’t adjusted for inflation.
Receipts at gas stations advanced 3.4 per cent, helping lift the headline figure as pump prices climbed in May due to the Iran war. Outside of receipts at gas stations, sales rose a firm 0.7 per cent.
The report shows consumers ramped up spending last month despite the highest average pump prices in almost four years. Companies have also noted surprising strength in demand, with big-box retailers including Target and Walmart signalling shoppers are resilient despite years of elevated inflation.
Eleven of 13 categories posted increases. Motor vehicle sales rebounded by 1.2 per cent, marking the biggest advance in almost a year.
The figures are consistent with card data from Bank of America, JPMorgan Chase and PNC Financial Services Group, which indicated spending continued to advance last month alongside larger-than-usual tax refunds and a rising stock market.
Still, the card data suggest wealthier Americans are spending at faster rates while lower-income households face tighter budgets and elevated borrowing costs. Recent reports have also shown a decline in inflation-adjusted wages and a slide in the saving rate, both of which suggest consumers may be running out of room to keep spending at the same pace.
The retail sales report showed so-called control-group sales – which feed into the government’s calculation of gross domestic product – were up 0.7 per cent. That measure excludes food services, auto dealers, building materials stores and gas stations.
Spending at restaurants and bars, the only service-sector category in the retail report, fell 0.1 per cent in May after a strong increase in April. BLOOMBERG
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