WASHINGTON: US retail sales grew by 1% in May, according to figures from the Commerce Department, although rising oil prices and a slowing labor market mean the harbingers of doom are far from silenced.
Retail sales grew at double the expected rate last month to $384.5 billion (€250.8bn; £197.6bn) – with growth levels even stronger when the struggling auto sector is discounted – while totals from March and April were also revised upwards.
The rise is attributed by some commentators to government "stimulus checks", which were first sent out in April to low- and middle-income citizens, with individuals receiving a minimum of $600 in tax rebates and families around $1,200, in an effort to boost the economy.
Tony Crescenzi, strategist at Miller Tabak, said: "With retail sales running at a pace of $385 billion per month, it takes an increase of just $3.85 billion to push retail sales up a percentage point."
As a result of May's figures, Morgan Stanley now predicts US growth of 0.5% in Q2, having previously forecast a downturn, although it also warned that surging oil prices and the condition of the labour market still mean a troubling economic climate.
This analysis was seemingly confirmed by the Labor Department, which has announced that import prices were up 2.3% in May, and 17.8% year on year – largely as a result of oil prices – while new and continuing unemployment claims also continued to rise.
Data sourced from Wall Street Journal Online; additional content by WARC staff