U.S. retail sales and restaurants rose 0.5%, more than expected in May, the latest sign in consumer spending strengthened this spring.
According to the Commerce Department Tuesday, retail sales increased 0.5% from the prior month to a seasonally adjusted $455.64 billion. Survey conducted by The Wall Street Journal had showed the expectation to be a 0.3% increase from the prior month.
“This is a very strong spring quarter for consumer spending,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh and the best forecaster of retail sales over the past two years, according to data compiled by Bloomberg. It adds to evidence that the economy “is bouncing back pretty solidly.”
As Americans bought automobiles and a range of other goods, the sales and restaurant rose. This number indicates that momentum was injected into the economy despite a sharp slowdown in job creation. Last month, employers added 38,000 jobs, the weakest performance since September 2010, the Labor Department said. However, the report also showed that hourly wages increased to a 2.5% annual gain.
”If wage gains continue to get closer to 3%, that’s going to give people more money in their pocketbooks and should help consumer spending,” S&P Global economist Beth Ann Bovino said Monday.
Other data also demonstrated a steady build-up of inflation pressures, as the dollar appreciated and oil price stopped sliding.
The signs of fairly healthy domestic demand could attract the attention of the officials at the Federal Reserve, who are gathering for the two-day meeting on Tuesday. The upbeat reports could keep a hike in July.
Sales at general merchandise stores, including department stores, dropped 0.3% last month and are down 0.7% from the prior year.