Retail sales to show spending holding up

By Pedro Nicolaci da Costa

WASHINGTON (BestGrowthStock) – U.S. retail sales likely notched an eighth straight month of gains in May as consumers took comfort in a gradually improving job market.

Sales are estimated to have climbed 0.2 percent last month following a 0.4 percent rise in April, according to median estimates of economists polled by Reuters. Excluding cars, sales were seen increasing 0.1 percent.

“Retail sales probably registered a decent gain in May, driven mainly by motor vehicles,” economists at Goldman Sachs said in a research note.

Declines in gasoline prices may have dented overall sales, analysts said.

The Labor Department will release the report on Friday at 8:30 a.m. EDT.

The U.S. economy has been recovering solidly since last summer, having posted three consecutive quarters of expansion. In the first three months of the year, gross domestic product grew 3.0 percent, according to Commerce Department data.

One of the big surprises has come from consumer spending, which has defied expectations for a prolonged slowdown and rebounded rather briskly, rising an annualized 3.5 percent in the first quarter.

However, some economists worry that because the pick up has not been accompanied by income growth, it reflects a potentially dangerous return to the old reliance on debt that helped push the country into crisis in the first place.

U.S. economic growth is projected to slow in the second half of the year, dipping beneath a 3 percent annual rate.

The prospect of softer economic activity was reinforced by turbulence in Europe, which has affected credit markets globally.

The latest recession was the deepest since the Great Depression, and pushed the unemployment rate to its highest levels since the early 1980s.

Ben Bernanke, Chairman of the Federal Reserve, said on Monday high unemployment presented a risk to the economic recovery, because it could lead Americans to hold off on spending.

Stock Market Today

(Reporting by Pedro Nicolaci da Costa, Editing by Chizu Nomiyama)

Retail sales to show spending holding up