Retail sales rose 0.3% in May after a revised 0.5 % gain in April that was much larger than previously estimated, the Commerce Department reported.
The median forecast of 83 economists surveyed by Bloomberg News called for a 0.6% advance. Consumers are ramping up spending as a healing job market and rising home values boost balance sheets.
“The more jobs there are, the more people with money in their pockets,” said Ward McCarthy, chief financial economist at Jefferies. “One of the key components of this cycle is that consumer spending has been moderate because income growth has been moderate.”
The reading for April previously was reported as a 0.1% increase. Six of 13 major retail categories showed gains last month, indicating the advance wasn’t broad-based, Commerce’s June 12 report showed.
The increase was paced by a pickup in demand at auto dealers and service stations. Excluding those categories, sales were unchanged after a 0.3% increase in April that was previously estimated as a 0.1% drop.
Retail sales excluding autos rose 0.1% after a 0.4% increase in April, the report showed. They were projected to advance 0.4 %, according to the Bloomberg survey median.
Core sales, the figures that are used to calculate gross domestic product and exclude such items as autos, gasoline stations and building materials, were unchanged last month after a revised 0.2% increase in April. The prior month had previously been reported as a 0.1% drop.