Retail figures show US went shopping in May

The case for a second-quarter recovery in the US economy grew stronger after retail sales data showed Americans emerged from a long, cold winter and headed to the shops in May.

Retail sales rose 1.2 per cent in May from April, and by 2.7 per cent from the same month in 2014. That was in line with expectations.

However, within the report were plenty of signs of life in the US economy, with almost all of the categories in the report seeing gains in May and the US Census Bureau revising up previously weak date for March and April.

“Let the shopping resume,” Gregory Daco, head of US macroeconomics for Oxford Economics, wrote in a note to clients that predicted a continuing acceleration in retail spending in the months ahead thanks to strong employment data, persistently low petrol prices and even rising wages.

The retail figures are seen as crucial to those building a case for the Fed to go ahead this year with its first rate rise in nine years.

Auto sales were up 2 per cent from April and 8.1 per cent from May 2014. Sales of clothing rose 1.5 per cent, while Americans also purchased 2.1 per cent more building materials than they did in April.

There were some areas for caution. Sales of electronic goods edged up only 0.1 per cent, as did the amount Americans spent on going out. – (Copyright The Financial Times Limited 2015)