Retail sales rose 0.9% in May, up from a revised 0.4% gain in April, according to new Commerce Department data. The increase was driven by warmer weather and lower gas prices, which fell about a penny overnight to $4.02, down 11% from $4.51 a month ago.
Retail Sales Boosted by Tax Refunds
Sales got a boost from generous government tax refunds in both April and May, though economists say that cushion is starting to fade. Excluding sales at gas stations, retail sales in May rose 0.7%. Sales at clothing and accessories stores rose 0.3%, while business at home furnishing and furniture stores rose 1%. Business at electronics and appliance stores fell 0.5%. Online sales rose 1.5%.
Consumers are the engine of the American economy, driving most of the nation’s economic growth. Their spending has remained resilient so far this year despite rising prices and lackluster hiring. Rising gas prices pushed inflation to its highest level in three years, U.S. data showed last week, with consumer prices rising 4.2% in May, compared with last year.
Gas Prices and Consumer Behavior
Even as gas prices come down, some analysts believe some shoppers will keep some of the habits they picked up as prices soared, like filling up the car at big box stores where they can get discounts. Visits to gas stations operated by big box chains like BJ’s, Costco and Sam’s Club, which offer discounts to members, began to accelerate in early March, aligning with a sharp rise in fuel prices.
Original reporting: KTBS 3 (Shreveport) — read the source article.
