Economy Watch: Retail Sales Spike in May
The Census Bureau reported that retail and food service sales were up 0.6 percent compared with April and 4.3 percent year-over-year.
By Dees Stribling, Contributing Editor
American consumers were in a What, Me Worry? state of mind in May, according to the Census Bureau on Thursday, which reported that retail and food service sales were up 0.6 percent compared with April and 4.3 percent year-over-year. The bureau adjusts sales figures for seasonal variations and holidays, but not for price changes.
Inflation has been fairly tame in recent years, so the increase represents a real rise in consumer purchases, despite the trepidation supposedly inspired by the sequester or a tepid jobs market or the unpredictable price of gas. Building material and garden equipment purveyors—DIY stores, mainly—did especially well, with sales up 10.1 percent compared with a year ago.
Americans were hitting the showrooms to buy cars as well, with a year-over-year sales increase in May of 9.5 percent for autos (and up 1.9 percent compared with the previous month). Exclude cars, and total retail sales were up, but only by 0.3 percent month-over-month in May, and 3.4 percent year-over-year.
Some retailers didn’t fare so well in May. The long-suffering furniture and home furnishing segment saw sales drop 0.8 percent for the month, and 0.5 percent for the year. Electronics and appliance stores saw sales of their gizmos fall 0.4 percent in May, and 0.5 percent since last year. On the other hand, non-store retailers—mostly the Internet these days, but also paper catalogs—experienced an increase of 0.7 percent in sales for the month, and a healthy 11.3 percent compared with May 2012.
Initial unemployment claims drop, markets rise
The U.S. Department of Labor reported on Thursday that for the week ending June 8, initial unemployment claims were 334,000, a decrease of 12,000 from the previous week’s unrevised figure of 346,000, the lowest in almost five years. The less jumpy four-week moving average was 345,250, representing an unusually large downward movement of 7,250 from the previous week.
The good news about retail sales and initial unemployment claims seem to have pumped up Wall Street on Thursday, with the Dow Jones Industrial Average spiking 180.85 points, or 1.21 percent. The S&P 500 gained 1.48 percent and the Nasdaq advanced 1.32 percent.
The upward movement in the U.S. equities markets was in contrast to volatility in other parts of the world, especially Japan. On Thursday (in Asia) the Nikkei dropped 6.4 percent to close at its lowest level since early April, but on Friday the index was up again by about 2 percent. The Japanese government is in the midst of making reforms to the country’s financial system, and the Bank of Japan is doing its own QE, but investors don’t seem persuaded these will go well.