Sales at U.S. retail stores increased markedly in May, adding to evidence of sharper economic growth despite a recent slowdown in hiring.
Figures released Tuesday morning by the U.S Commerce Department showed that retail sales increased 0.5% in May from the month before to a seasonally-adjusted $455.64 billion, ed by increased spending online and at gas stations. Economists had expected sales would increase 0.3% from the prior month.
Sales for April were unrevised at a 1.3% gain, the strongest advance since March 2015.
The latest data indicates consumer spending, which accounts for two-third of U.S. economic output, remains healthy. When evidence of firming inflation, a solid housing market, low layoffs and rising number of job openings are factored in, the economy would appear on decent footing—outside of a May jobs report showing that hiring fell sharply.
The latest data presents a complicated picture to Federal Reserve officials beginning a two-day meeting Tuesday. May’s job increase of just 38,000, the weakest performance since September 2010, likely takes any rate increase off the table this week. But if the economy is accelerating and inflation is firming, that could give policy makers leeway to signal a rate increase could come in July, if the hiring picture improves.
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