US retail sales in May grow 0.5% with sales at $519 billion
US retail sales in May increased in many industries.
US retail sales in May increased by 0.5%, according to the US Commerce Department. While the news is encouraging, retail purchases still fell below economists’ predictions of 0.6% growth.
May US retail sales details
Vehicle purchases and car part sales increased by 0.7%, reversing a drop of 2.3% in April. Electronics and sporting goods stores had sales growth of 1.1%. Online sales jumped by 1.4%. The only decline in retail sales in May was in department store sales. Department store purchases decreased by 0.7% last month.
What do economists say about May US retail sales?
David Berson, chief economist at Nationwide Financial, believes that the strong retail numbers show that the worries about a possible recession are premature.
'The consumer didn't fall by the wayside. The concerns that the economy is really slipping dangerously are overstated at this point,’ said Berson.
Oxford Economics wrote in a note to clients that the May US retail statistics demonstrate a robust US economy.
‘This confirms that the main engine of US growth is still humming along and certainly flies in the face of recession fears,’ wrote Oxford Economics.
The economic forecasting firm also had an optimistic view of the US economy in the summer.
‘Looking ahead, buoyant consumer confidence, healthy job creation, tame inflation, lower gas prices, and solid wage growth should support robust household outlays in coming months,’ noted Oxford Economics.
Will better retail data affect US GDP and the Fed?
The US retail numbers are a welcome change from other lackluster economic data like a disappointing jobs report and worse-than-expected US Q1 gross domestic product (GDP). The May US retail statistics may boost US Q2 GDP, but may not have any impact on the US Federal Reserve.
While Fed chair, Jerome Powell, said the Fed may act to help the US economy, the latest US retail sales figures could lessen pressure on the Fed to reduce interest rates this summer.
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