U.S. retail sales rose by the largest amount in four months in May, as a rebound in demand at auto dealerships and gas stations helped to offset continued weakness at department stores.
The Commerce Department said Thursday retail sales increased by 0.5 per cent last month, in line with economists' expectations. It was the largest increase since sales surged by 1.7 per cent in January following six straight declines.
The May advance could be another signal that the worst of the recession is over. However, the all-important consumer sector is not expected to come roaring back, given all the troubles facing households as the country slogs through the worst recession in decades.
The 0.5 per cent May increase followed two straight declines including an April drop of 0.2 per cent, which was originally estimated as a larger 0.4 per cent fall.
Auto sales rose by 0.5 per cent last month, the best showing since a 2.7 per cent surge in January. Even with the gain, sales are still 21.5 per cent below where they were a year ago as automakers continue to struggle with the worst sales environment in decades. In an effort to spur demand, automakers have stepped up their incentive offers.
Excluding autos, retail sales were up 0.5 per cent in May, better than the 0.2 per cent gain that economists had been expecting.
Much of that strength, however, came from a 3.6 per cent jump in sales at gasoline service stations, an increase which reflected in large part rising gasoline prices. The retail sales are not adjusted for inflation.
Sales were also up at hardware stores, grocery stores and health stores.
Those gains helped to offset a 0.2 per cent drop at general merchandise stores, a category which includes department stores and big retail chains such as Wal-Mart.
