U.S. Retail Sales Post Gains after Two Consecutive Monthly Declines
U.S. consumers increased their retail purchases by 0.5% in May after sales contracted by 0.2% in April (revised from the initially reported 0.4% decline). Sales of autos and parts posted a 0.5% rise, the first increase in that category since January. Excluding autos, retail sales increased by 0.5% following the 0.2% drop in April (revised from -0.5%).
Rising gasoline prices pushed the gasoline component up by 3.6%; excluding gasoline, sales still rose 0.2% on the month. At 1.3%, building materials posted their biggest gain since April 2008. Sales increases were also evident in clothing (up 0.4%), food (up 0.4%) and the health & personal care category (up 0.7%).
Excluding autos, gasoline and building materials, sales were flat compared to the prior month as some categories remained weak. There were declines in furniture sales (down 0.4%), electronics (down 0.5%) and department store sales (down 0.7%).
Today's positive growth in U.S. retail sales is a welcome reprieve from the two consecutive prior months of contractions. Nonetheless, personal consumption in the second quarter remains weak. We anticipate that personal consumption will make a positive contribution to quarterly growth beginning in the third quarter of this year as fiscal and monetary stimulus gain traction, propelling the overall economy into positive quarterly growth territory in the second half of 2009.
Initial jobless claims
In another report out this morning, initial jobless claims declined to 601,000 for the week of June 6 following the prior week's 625,000 reading (revised from 621,000). Initial claims are now at their lowest point since the week of January 24 of this year.
RBC Financial Group
http://www.rbc.com
The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
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