Strong Rebound in May Retail Sales

Spending on U.S. retail and food services made a strong comeback in May, rising by 1.2%, while the flat reading in April was revised up to 0.2%. Core retail sales (ex-autos, building supply centers and gasoline stations) increased by 0.5%.

Eleven of the 13 major sales categories reported an increase in seasonally adjusted sales over the month. Posting stronger sales in May were motor vehicles (2.0%); furniture and home furnishings (0.8%); electronics and appliance stores (0.1%); building material and garden supply dealers (2.1%); food and beverage stores (0.2%); gasoline stations (3.7%); clothing and clothing accessories stores (1.5%); sporting goods, hobby, book and music stores (0.8%); general merchandise stores (0.8%); nonstore retailers (1.4%); and food and drinking places (0.1%).

The only category that recorded a decline in sales last month was health and personal care stores (-0.3%), while sales at miscellaneous store retailers were flat over the month.

On a year-over-year basis, total retail sales in May were up by 2.7%. Most major sectors reported a gain over the last 12 months except for gasoline stations (-18.6%); electronics and appliance stores (-1.7%) and general merchandise stores (-0.4%).

Overall, this was a good report. On a year-over-year basis, at 2.7% retail sales growth was weak. However, most of that weakness can be attributed to the 18.6% year-over plunge in gasoline sales that resulted from lower prices. The categories of  retail sales that go into the GDP calculation to measure consumer spending were stronger than expected, an indication that consumer demand is alive and well. (Kimberly Ritter-Martinez)

Source:  http://www.census.gov/retail/marts/www/marts_current.pdf