- Esther George, Kansas City Fed President
US retail sales surged the most in a year in April as Americans boosted purchases of automobiles and a range of other goods, suggesting the economy was regaining momentum after growth almost stalled in the first quarter. According to the Commerce Department, retail sales advanced 1.3% last month, the largest increase since March 2015. March's retail sales were revised up to a 0.3% decline compared with the previously reported 0.4% drop. Stripping out automobiles, gasoline, building materials and food services, retail sales climbed 0.9% in April following an upwardly revised 0.2% gain in March. If consumers can spur stronger economic growth in the coming months, that could influence the Fed's decision on when to hike its benchmark interest rate. Macroeconomic Advisers revised its expectation for second-quarter GDP growth to a 2.3% annualized increase from 2%. Barclays raised its forecast to 2.2% from 2%. The Federal Reserve Bank of Atlanta's real-time estimate of economic growth moved to a 2.8% rise, from the prior estimate of 2.2%.
Separately, consumer confidence rebounded to its strongest level in nearly a year in May. The University of Michigan preliminary consumer sentiment index for May came in at 95.8, compared with a final April reading of 89.0.
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