RTTNews - Retail sales showed a notable increase in the month of May, according to a report released by the Commerce Department on Thursday, although the sales growth was due in large part to higher gasoline prices that drove up sales at gas stations.
The report showed that retail sales rose 0.5 percent in May following a revised 0.2 percent decrease in April. Economists had expected sales to increase by 0.5 percent compared to the 0.4 percent decrease originally reported for the previous month.
A considerable increase in sales by gas stations contributed to the retail sales growth, with gas station sales jumping 3.6 percent in May after slipping 0.8 percent in April. The sales growth reflected the recent increase in gas prices.
Excluding the increase in sales by gas station, retail sales showed a much more modest increase of 0.2 percent.
With the report showing next to no growth in real terms, Chris Low, chief economist at FTN Financial, said, Unfortunately, there is little to cheer about in the retail sales report.
This does not change our expectations for a second-half recovery, however, he added. The recovery always was all about stimulus, not consumers.
The report also showed that sales by motor vehicle and parts dealers increased by 0.5 percent in May after falling 0.4 percent in April.
Nonetheless, retail sales still rose 0.5 percent in May excluding the increase in auto sales. The increase in ex-auto sales exceeded analyst estimates of a 0.2 percent increase.
While sales by building material and garden equipment dealers also showed a notable 1.3 percent increase in May, the growth was largely offset by lower sales by department stores and sporting goods, hobby, book and music stores.
In other economic news, the Labor Department released a report showing a bigger than expected decrease in initial jobless claims in the week ended June 6th, although the report also showed that continuing claims rose to another new record high.
The report showed that weekly jobless claims fell to 601,000 from the previous week's revised figure of 625,000. Economists had expected jobless claims to edge down to 615,000 from the 621,000 originally reported for the previous week.
At the same time, continuing claims in the week ended May 30th rose to 6.816 million from the preceding week's revised level of 6.757 million. Due to an upward revision to the previous week's figure, continuing claims rose to a new record high for the 19th consecutive week.
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