Retailers in the United States have recently noticed big gains in their sales. Data from May is the most recently released, and as of mid-June, we know that the increase in sales during this month was greater than expected. To show just how fast the economic growth is, consider that consumers kept buying motor vehicles despite the rise in gasoline prices.

The Numbers

Various sources have slight variations in figures for Retail Sales in the U.S., but they all show an increase in May. The Commerce Department announced that May’s retail sales increased by 0.8 percent, which was the largest advance since November and Black Friday. At the same time, it adjusted the previous April figure of a 0.2 percent gain, increasing it to 0.4 percent. The economists Reuters polled had anticipated a rise of 0.4 percent in retail sales for May, meaning that the official figures doubled these predictions. In comparison with last year, May 2018’s retail sales increased by 5.9 percent.

Variations by Industry

Retail sales, with the exceptions of building materials, food, gasoline, and automobiles, experienced a 0.5 percent increase in May, following a 0.6 percent increase in April. Auto sales increased by 0.5 percent in May and 0.2 percent in April. Meanwhile, service station receipts experienced a 2 percent surge due to higher gas prices. In fact, gas prices have risen 15.5 percent based on information from the U.S. Energy Information Administration. Retailers will have to keep a close eye on this figure since rising gas prices can limit additional funds that consumers have available for retail purchases.

Building material stores declined by 0.8 percent in April but rebounded wholeheartedly with a 2.4 percent boost for May. Clothing store sales increased an impressive 1.3 percent, which marks the largest gain following March 2017. While retail sales in most sectors improved in May, some did see a decrease. Sporting goods stores saw a drop of 1.1 percent, and furniture sales declined by 2.4 percent.

The Future

There is also some uncertainty as to whether these gains will continue, particularly as the Federal Reserve raised the country’s benchmark lending rate for a second time in mid-June and has two more planned increases this year plus four more in 2019. These interest rate hikes might lead to a decrease in discretionary spending and are something that retailers are keeping a close eye on to predict their future sales.

Sources:
https://www.foxbusiness.com/markets/us-retail-sales-post-biggest-gain-in-6-months
http://www.startribune.com/us-retail-sales-climb-in-may-by-the-most-in-6-months/485555762/

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