Retails sales increased for the fourth month in a row, but the gains were less than what most economists had expected.
The Commerce Department announced Thursday that retail sales gained 0.3 percent for the month of May. However, most economists had expected retail sales to grow 0.6 percent, according to Reuters.
Though the numbers were less impressive than expected, some sectors experienced growth. Major gains were made in the sales of automobiles. Sales of cars jumped 1.4 percent last month, and building materials and garden equipment grew 1.1 percent.
Other sectors didn’t fare so well. Sales at department stores went down 1.4 percent. Electronics and appliance stores also experienced a decline, of 0.3 percent.
"It is often the case that a good auto month is correlated with a poor showing on the discretionary spending front," Chris Christopher, director of consumer economics at IHS Global Insight, writes via e-mail. "If a family is putting a down payment on a new automobile, rushing out to buy the latest electronic gadget or going to a fancy restaurant is not always in the cards. Americans have not thrown caution to the wind."
April's retail sales report was revised upward, from 0.1 percent to 0.6 percent. The change makes total sales from March to May up 4.3 percent as compared to the same time last year, according to the report. Though sales were lower than expected, the change for April’s numbers keeps retail sales growth on track for the second quarter of this year.
"Bottom line, the May miss relative to expectations was offset by the revision higher in April, thus leaving Q2 GDP estimates the same,” Peter Boockvar, managing director at the Lindsey Group, told RTTNews.
In another report, the Labor Department stated initial claims for state unemployment benefits climbed 4,000 to a seasonally adjusted 317,000 for the week ended June 7, according to the report.
Though retail sales were less than expected and jobless claims unexpectedly rose last week, experts believe the economy strengthening.
“Retailers are on course for their best calendar quarter for over three years, providing further evidence that the US economy is warming up from the cold spell earlier in the year," Chris Williamson, chief economist at Markit, writes via e-mail.