US retail sales rose 0.3 percent in May

Published on NewsOK Modified: June 12, 2014 at 1:46 pm •  Published: June 12, 2014

WASHINGTON (AP) — U.S. retail sales rose modestly in May as consumers turned cautious in their spending. But the weaker-than-expected result is unlikely to derail overall economic growth in the second quarter.

Retail sales rose 0.3 percent in May, helped by a jump in demand for autos, the Commerce Department said Thursday. The result follows a 0.5 percent climb in April, which was revised up from an initial estimate of 0.1 percent. March sales surged 1.5 percent — the biggest one-month gain in four years.

Analysts said any disappointment in May was offset by the change in April's figure.

"May retail sales fell short of estimates, although upward revisions to April make it about a wash versus consensus forecasts," said Jay Feldman, director of U.S. Economics Research at Credit Suisse.

Retail sales had fallen sharply in January as winter storms cut into shopping and various other types of economic activity. Economic growth went into reverse in the first quarter, shrinking at an annual rate of 1 percent. But the revival in consumer spending has led economists to predict a solid rebound to 3 percent growth or better in the current April-June quarter.

For May, auto sales increased 1.4 percent. The rise in auto sales had been expected after dealers reported last week that sales in May jumped to a nine-year high, helped by brisk demand for SUVs and pickup trucks. But sectors outside of autos did not fare as well.

Paul Dales, senior U.S. economist at Capital Economics, said that the declines at department stores and appliance stores were hard to understand, given the rapid rise in employment. Households are also feeling wealthier with the strong gains in the stock market and in home prices.

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