US retail sales show unexpected 1% jump in May

12 June 2008 18:00  [Source: ICIS news]

WASHINGTON (ICIS news)--Sales at US retail stores rose by an unexpected 1% in May to $385.4bn (€250.5bn) on a seasonally adjusted basis, the Commerce Department said on Thursday, apparently driven by federal economic stimulus checks sent to taxpayers in April.

 

Market analysts had been expecting an increase of about 0.5%.

 

The department said that May’s retail sales volume also represented a 2.5% increase over the same month a year ago.

 

In addition, the Commerce Department revised April retail figures, reporting a 0.4% increase in that month instead of the earlier estimate of a 0.2% decline.

 

However, a substantial portion of May’s increase in retail sales could be attributed to gasoline sales, which were up 2.6% in the month compared with April and were nearly 14% higher than in May 2007.

 

Retail sales of automobiles showed a bare 0.1% increase in May, reflecting a continuing slump in car purchases, especially among gas-guzzlers.

 

Sales of furniture and home furnishings rose 0.4% in May, the department said, apparently held down by ongoing troubles in the US home construction sector.  Furniture and home furnishings in May were nearly 5% below the same month a year earlier.

 

Retail sales are a key indicator of consumer spending and confidence and are closely watched by economists because consumer outlays account for as much as 70% of US commercial activity.

 

The federal stimulus programme calls for about $100bn in payments to taxpaying consumers, with about half of that total having been dispersed so far.

 

($1 = €0.65)

 

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By: Joe Kamalick
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