Sales at US retailers rose in May and the number of workers filing new applications for jobless benefits fell for a fourth straight week last week, according to official data today that suggested the recession was abating.
The Commerce Department said total retail sales rose 0.5 percent, the first advance in three months, lifted by strong gasoline and building material receipts. Sales fell 0.2 percent in April.
A separate report from the Labor Department showed the number of US workers filing new claims for jobless aid fell 24,000 to 601,000 in the week ended June 6th, the lowest since January 24th.
US stock index futures briefly rose on the reports.
The reports bolstered the argument that the economy's severe recession was close to hitting a bottom, with growth likely to return in the second half of the year.
The sales report raised optimism that consumer spending would probably be flat to modestly lower in the second quarter, instead of falling sharply as expected by most analysts.
Spending, which accounts for about 70 per cent of US economic activity, rose 1.5 per cent in the January-March period, after a 4.3 per cent dive in the fourth quarter.
Still, retail sales were partly boosted by increases in gasoline prices, which could crimp consumers' wallets.
"The tender green shoots could be snuffed out by the frost of higher mortgage rates and gasoline prices," said T.J. Marta, chief market strategist at Marta on the Markets in Scotch Plains, New Jersey.
Gasoline sales jumped 3.6 per cent in May after dropping 0.8 per cent the previous month. Excluding gasoline, retail sales rose 0.2 per cent. Sales of building materials climbed 1.3 per cent in May, the biggest advance since April last year, after falling 0.6 per cent in April.
Excluding motor vehicles and parts, sales rose 0.5 per cent in May, compared to a 0.2 decline the prior month, the Commerce Department said. Vehicles and parts sales rose 0.5 percent after a 0.4 per cent fall in April.
Soft spots in the report included sales of electronic goods, which fell 0.5 per cent in May after declining 0.9 per cent the previous month.
While initial claims for state unemployment insurance benefits declined for the fourth straight week, the number of people staying on the benefit rolls after collecting an initial week of aid rose to a record 6.82 million in the week of May 30th, the latest week for which data is available.
Reuters