The Census Bureau reported that retail sales jumped 0.6 percent in May, building on the 0.1 percent gain of April. This was much larger than the expected increase of 0.4 percent, which had been the consensus estimate. The biggest contributor to the gain was increased auto sales, which grew by 1.8 percent for the month and have risen 8.5 percent year-over-year. This suggests that the motor vehicle segment has begun to recover from some the slower activity levels seen earlier this year. To illustrate just how much the auto sector’s purchases impacted the total spending gain, retail sales would have risen just 0.3 percent without them included.
There were strengths outside of autos, as well. Since May 2012, retail sales have increased 4.3 percent, or 3.4 percent if you exclude auto purchases. Some of the biggest increases in retail spending in May were from miscellaneous store retailers (up 1.2 percent), building materials stores (up 0.9 percent), food and beverage stores (up 0.7 percent), nonstore retailers (up 0.7 percent), and sporting goods and hobby stores (up 0.6 percent).
Lower gasoline prices helped to lead non-auto retail sales down in April, and gasoline station spending was off 0.2 percent in May, as well. On a year-over-year basis, gasoline station retail sales have fallen 1.6 percent. In reality, the price of West Texas intermediate crude rose from an average of $92.02 per barrel in April to $94.51 in May, which could suggest higher spending levels in the June survey from gasoline retailers.
Other areas with declining spending included furniture and home furnishing stores (down 0.8 percent), electronics and appliance stores (down 0.4 percent), restaurants and bars (down 0.4 percent), and clothing and accessories retailers (down 0.2 percent).
Chad Moutray is the chief economist, National Association of Manufacturers.
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