United States: Retail sales jump back up in May
June 11, 2015
In May, growth in retail sales increased 1.2% over the previous month, in nominal terms. The print was well above the 0.2% increase recorded in April (previously reported: 0.0% month-on-month) and just undershot market expectations of a 1.3% increase. The weak result in April had generated doubts about the strength of an economic rebound after a poor Q1 GDP result. However, May’s figure suggests that the recovery is on track. Retail sales are a good indicator for the evolution of consumer spending, a key part of economic growth in the United States, as it accounts for over two thirds of overall GDP.
May’s result mainly reflects an increase in sales at gas stations, building material suppliers, motor vehicle dealers and clothing retailers.
Retail sales excluding cars and gas—a closely watched subcategory of the retail trade index—expanded 0.7% in May over the previous month. The result came in above the 0.2% increase recorded in April and overshot the 0.5% increase expected by the market.
Retail sales rose 2.7% in annual terms in May, which was above the 1.5% tallied in April. However, the annual trend declined slightly, with annual average growth in retail sales falling from April’s 3.6% to 3.5%.
Author: Carl Kelly, Economist