According to the latest monthly report from the US Census Bureau, retail sales revived in the country during the month of May. The monthly advance of 1.2 percent represented a considerable improvement over the sluggish 0.2 percent increase in April. Investors now believe that US economic growth in Q2 would not be repeating the weak run of Q1 and the economy is finally gathering steam.
Solid retail sales data gave boost to robust job growth in May and stabilized manufacturing activity to suggest that the US economy was finding momentum after getting off to a slow start in Q2. The most recent growth estimate of U.S. government revealed gross domestic product contracted at a 0.7 percent annual pace in Q1 but data on healthcare spending and revisions to trade, construction spending, and wholesale inventory reports suggested output likely shrank at only a 0.1 percent rate.
Source: US Census Bureau
During the first quarter, the value of Americans’ homes increased by $411 billion and the financial holdings of nonprofits and households rose by $1.1 trillion during the first quarter, boosted primarily because of higher holdings of stocks and mutual fund shares. A report by the Federal Reserve showed that an increase of $1.6 trillion was added to the total wealth of American families to put it at a new record high of $84.9 trillion.
Last month, retail sales excluding automobiles, building materials, food services, and gasoline increased 0.7 percent after an upwardly revised 0.1 percent rise the previous month. Sales of garden equipment and building materials advanced 2.1 percent, while receipts at online stores climbed 1.4 percent. There was a 1.5 percent surge in sales at clothing stores and sales at sporting goods stores increased 0.8 percent.
Analysts and investors believe that consumer spending in the world’s largest economy is expected to remain fairly strong in the next few months. Many believe that the positives would be complemented by rising house prices, tightening labor market, and high savings.