"The strength of the May retail sales report should provide plenty of comfort to those concerned that the recent slump in payrolls would be followed by a downturn in activity".
- Capital Economics.
The US retail sales advanced more than expected during the previous month since Americans bought automobiles and a range of other significant goods, hinting that economic growth was gaining momentum despite a weak job creation. According to the Commerce Department release made on Tuesday, retail sales rose 0.5% in May after surging by an unrevised 1.3% in April. It is the second straight month of lifted gains from a year ago. The gains were spurred mainly by non-store retailers, online shopping and gasoline stations spending. Compared with a year earlier, the total amount of sales, in turn, expanded 2.5%. That is highly above the annual rate of inflation, which currently equals 1% this year. Overall, retail sales have strengthened considerably during the past two months despite a slow start at the beginning of the current year.
Meanwhile, stabile gains in consumption will spur the economy helping to accelerate from a weak beginning at the start of the year and strengthening forecasts made by Federal Reserve officials that the economic slowdown is temporal. Moreover, a pickup in wages also will help ensure that households remain a mainstay of the economic expansion.
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