Online, gas purchases fuel U.S. retail sales to 0.5% increase last month
WASHINGTON—Sales at U.S. retailers increased solidly in May, adding to evidence of accelerating economic growth despite a recent slowdown in hiring.
Led by increased spending online and at gas stations, retail sales increased 0.5% in May from the prior month to a seasonally adjusted $455.64 billion, the Commerce Department said Tuesday. Economists surveyed by The Wall Street Journal 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 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.
The Fed “should be encouraged” by the retail report, said Sung Won Sohn, an economist at California State University- Channel Islands. “However, the monetary authorities would want to make sure that the economy, both employment and retail sales, are on clear upward trends before pulling the trigger again.”
The majority of economists surveyed by The Wall Street Journal earlier this month, after the latest jobs report, predicted a July increase in the Fed’s benchmark rate. It would be the first increase since December.
