U.S. retail sales rose less than expected in May, the government reported Thursday, but the fourth consecutive monthly gain added to evidence that consumer spending will contribute to stronger economic growth.
The Commerce Department said retail sales rose 0.3 percent last month, helped by a surge in demand for autos. Economists expected a bigger 0.6 percent gain. Retail sales rose 0.5 percent in April and jumped 1.5 percent in March, which was the biggest gain in four years.
Consumer spending on automobiles rose 1.4 percent last month. Sales at building-materials and garden-equipment stores rose 1.1 percent. Sales at gasoline stations rose 0.4 percent, reflecting higher retail prices. Sales fell at sporting-goods stores, electronics and appliances stores, clothing retailers, and restaurants.
Core retail sales, which exclude automobiles, gasoline, building supplies, and food services, and correspond most closely with the consumer-spending component of gross domestic product (GDP), were unchanged in May. However, core sales were revised to show a 0.2 percent gain in April, in contrast to an earlier estimate of a 0.1 percent drop.
Retail sales—which account for one-third of consumer sales—fell sharply in January as winter storms limited shopping and various other types of economic activity. Overall economic growth reversed in the first quarter, shrinking at an annual rate of 1 percent. But the revival in consumer spending has led economists to predict a solid rebound to 3 percent growth or better in the current April-June quarter.