The Commerce Department said Thursday that retail sales increased 0.5% last month, in line with economists’ expectations. It was the largest increase since sales rose 1.7% in January after six consecutive declines.
WASHINGTON (AP) — Retail sales have risen by the largest amount in four months in May, as a rebound in demand at auto dealerships and gas stations helped to offset continued weakness at department stores.
The Commerce Department said Thursday that retail sales increased 0.5 percent last month, in line with economists’ expectations. It was the largest increase since sales rose 1.7 percent in January after six consecutive declines.
While the May advance may offer some optimism about the economy, the all-important consumer sector is not expected to come roaring back, given all the troubles facing households as the country slogs through the worst recession in decades.
The 0.5 percent May increase followed two consecutive declines including an April drop of 0.2 percent, which was originally estimated as a larger 0.4 percent fall.
Auto sales rose 0.5 percent last month, the best showing since a 2.7 percent surge in January. Even with the gain, sales are 21.5 percent below where they were a year ago as automakers continue to struggle with the worst sales environment in decades. In an effort to spur demand, automakers have stepped up their incentive offers.
Excluding autos, retail sales were up 0.5 percent in May, better than the 0.2 percent gain that economists had been expecting.
Much of that strength, came from a 3.6 percent jump in sales at gasoline service stations, an increase which reflected in large part rising gasoline prices. The retail sales are not adjusted for inflation.
Sales were also up at hardware stores, grocery stores and and health stores.
Those gains helped to offset a 0.2 percent drop at general merchandise stores, a category which includes department stores and big retail chains such as Wal-Mart.