Retail sales in May surpassed expectations with an increase in consumer spending that is projected to uplift the U.S. economy in the second quarter.
Retail sales grew by 0.5 percent, beating a projection of 0.3 percent increase in sales. The increase comes on the heels of a 1.3 percent boost in sales last month, which marked the biggest gain in sales this year, Bloomberg reported. Auto and fuel sales showed a 0.3 percent increment in May, meeting the median forecast of analysts.
The pickup in sales reportedly falls in line with Fed Reserve's prediction, which said that the initial slowdown would be temporary. An increase in wages and a steady job market are some of the factors that will contribute to positive growth in the coming months, as Bloomberg pointed out.
“This is a very strong spring quarter for consumer spending,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc., a top forecaster of retail sales. The upticks reflects that the economy “is bouncing back pretty solidly.”
The boost in sales last month was reportedly fueled by an increase in online sales that fall in the non-store retailers category, which saw a 1.3 percent increase. The improvement underlines an increase in commodity consumption in nine of the top 13 categories. Attaining the highest sales since last November, sales of sporting goods increased by 1.3 percent and 0.8 percent in clothing stores.
The apparel category is further expected to grow after an unusually cold season that dampened spring sales. Last week, Goldman Sachs predicted that online apparel and accessory might see a 20 percent increase in sales by 2020.
The automobile category also helped boost the overall numbers. Sales at automobile dealers saw a 0.5 percent improvement after a strong previous month that saw a 3.1 percent increase.