Retail Sales Inch Up 0.1% in May

U.S. retail sales rose 0.1% in May to $308.8 billion, the Commerce Department said Thursday, led by more purchases of furniture, electronics and clothing.

Sales had declined 0.3% in April, which analysts attributed to anxiety related to the war with Iraq, Bloomberg reported. Economists had forecast no change in May retail sales, Bloomberg said.

Almost all trucking operations depend on the health of retail sales because such sales involve nearly every type of cargo. Consumer spending accounts for two-thirds of all economic activity.

Also Thursday, the Labor Department said that initial filings for unemployment benefits declined to 430,000 last week, from a revised 447,000 the week before. This was the fifth time in the past seven weeks claims have declined.

Commerce also said Thursday inventories at U.S. businesses rose 0.1% in April following a revised 0.3% increase in March, while business sales slumped 1.5%, the biggest drop since September 2001.

Even though claims have come down from a 13-month high of 459,000 in the week ended April 19, the total has held above 400,000 since early February, which many economists consider a sign of labor market weakness, Reuters said.

The four-week moving average of claims, a less volatile measure, rose to 433,750 from 431,500.

Meanwhile, Commerce said that excluding automobiles, retail sales increased 0.1% in May after falling 0.9% the previous month.

When also excluding a price-induced decline in gasoline station receipts, retail sales increased 0.6% last month.

Commerce noted that the 4.3% drop in service station sales hurt the overall May retail sales numbers, but analysts told Bloomberg falling motor fuel prices would spur additional consumer spending in the second half of the year.

Analysts told the Associated Press that companies kept business inventories lean as they waited for a pickup in sales following the Iraq war. The economy needs to improve before corporate managers grow confident enough to start building inventory, analysts said.

pril's rise in business inventories brought the value of goods on hand at manufacturers, retailers and wholesalers to $1.172 trillion.

The drop in sales pushed the inventory-to-sales ratio, which measures the time goods sit on shelves, up to 1.4 months compared with 1.38 months in March.