Economy

US Retail Sales surges by 17.7% in May vs. 8% expected

US Retail Sales surges by 17.7% in May vs. 8% expected”

The monthly report, due to be released by the Commerce Department on Tuesday (June 16), is expected to show overall receipts at U.S. retailers jumped 8 per cent last month, according to a Reuters poll of economists.

Some of the largest spikes came in industries hit hard by the lockdowns such as clothing and accessories stores, whose sales surged 188 percent last month after plunging 75.2 percent in April, according to the feds. Even with the improvement, the value of all retail sales remained 6.1% below last year's level."As states began to reopen their economies, households reopened their wallets,"said Andrew Grantham, economist at CIBC".

While certainly an eye-catching bounce, it would retrace only about a quarter of the sales drop registered in the record back-to-back declines in the two previous months when widespread stay-at-home orders were imposed to stop the spread of Covid-19, the respiratory illness caused by the novel coronavirus.

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The U.S. economy dropped into recession in February as the viral outbreak brought a record-long expansion to an abrupt end. And even though US employers added 2.5 million jobs in May, economists say ongoing uncertainties about the public health crisis and the economy have make it hard to know for sure when consumers and businesses could return to levels of spending more common in the last few years.

Excluding automobiles, gasoline, building materials and food services, retail sales surged 11 percent in May after tumbling 12.4 percent in April. "The reality is, we still have high unemployment numbers and despite the feel-good momentum of the last month, the consumer economy is still not on very strong footing". Furniture store sales rose 89.7 percent. The Federal Reserve expects the nation's gross domestic product to shrink 6.5 percent this year, followed by a 5 percent increase in 2021. Restaurants and bars, meanwhile, notched a 29 percent increase in sales, while online sales rose 9 percent. Sales at electronics and appliance stores soared 50.5 percent. Spending at hobby, musical instrument and book stores vaulted 88.2 percent. Together, those categories accounted for more than half the overall gain in sales.



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