May Witnesses Climbing Retail Sales, Signals Firming US Economy

The data released on Thursday signals a healthy May for US economy as the retail sales increased by 1.2% from the previous month. With households showing preference for automobiles and several other goods, the retail sales sprang signalling a positive growth ahead.

The core retail sales, which exclude sales of automobiles, gasoline, building materials and food services increased 0.7% in May, rising above the analyst forecasts of 0.5% after a meagre increase in April by 0.1%.

May registered a 2.0% increase in receipts at auto dealerships, a 3.7% rise in oil sales owing to escalation in gasoline prices, 0.1% gain in sales at electronic and appliance stores. The sales at furniture stores increased 0.8% and sales of building materials and garden equipment registered 2.1% increase.

Further, the clothing stores had 1.5% surge in sales and sports stores recorded a 0.8% rise. The sales at online stores rose by 1.4% and sales at restaurants and bars grew 0.1%.

Laura Rosner, an economist at BNP Paribas in New York stated," We continue to expect robust consumption growth for the remainder of the year".

Though, the unemployment benefits claims showed a slight increase, the labour market remained robust. It was reported that 280,000 jobs were created in May, up from 221,000 in April.

Solid retail sales data, robust job growth and stabilizing manufacturing activity in May are enough precursors to prompt the Federal Reserve to raise interest rates in September.

Anthony Karydakis, chief economic strategist at Miller Tabak in New York, stated," Today's data, including the trend-like jobless claims number, keep September firmly in place as a credible option for the Fed".