Financial News: U.S. Retail Sales Growth Exceeds Estimates In May

U.S. Retail Sales Growth Exceeds Estimates In May

(RTTNews) - Retail sales in the U.S. increased by much more than expected in the month of May, according to a report released by the Commerce Department on Wednesday.

The Commerce Department said retail sales grew by 0.9 percent in May after rising by a downwardly revised 0.4 percent in April.

Economists had expected retail sales to climb by 0.5 percent, matching the increase originally reported for the previous month.

"The stronger-than-expected rise in retail sales is consistent with real consumer spending growth just north of 2% annualized in Q2, better than our baseline forecast," said Michael Pearce, Chief U.S. Economist at Oxford Economics.

He added, "We still think higher refunds supported spending in May and that higher gasoline prices will put some pressure on spending over the coming months, but overall, the consumer remains resilient."

The report showed a notable rebound in sales by motor vehicle and parts dealers, which shot up by 1.2 percent in May after sliding by 0.9 percent in April.

Excluding the jump in sales by motor vehicle and parts dealers, retail sales still advanced by 0.8 percent in May after climbing by 0.7 percent in April. Ex-auto sales were expected to rise by 0.5 percent.

Sales by gas stations helped lead the way higher, spiking by 3.4 percent in May after surging by 2.4 percent in April amid higher gasoline prices.

The report also showed significant growth in sales by miscellaneous store retailers, non-store retailers and furniture and home furnishings stores.

Core retail sales, which exclude automobiles, gasoline, building materials and food services, increased by 0.7 percent in May after rising by 0.5 percent in April.

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