WASHINGTON — Retail sales rose at specialty stores, department stores and discounters in May, as consumers stepped up spending, the U.S. Commerce Department’s monthly report revealed Thursday.
Sales at apparel and accessories stores increased 1.5 percent on a seasonally adjusted basis to $21.3 billion, while sales at department stores gained 0.8 percent to $13.7 billion last month. General merchandise store sales, a category that includes department stores and discounters, rose 0.8 percent to $55.5 billion.
“With income, employment and consumer confidence all improving, consumers were encouraged to open their wallets this spring,” said Jack Kleinhenz, chief economist at the National Retail Federation. “Retail sales gains were evident across business sectors with the one exception being health and personal-care stores. The improvement in retail sales is consistent with employment gains and the recent uptick in consumer credit. On the whole, sales are growing at a reasonable pace and regaining momentum.”
Kleinhenz said he expects stronger sales growth going forward this year based on the latest economic data, but, “stronger wage growth is needed to sustain further gains in retail sales.”
Scott Hoyt, senior director of consumer economics at Moody’s Analytics, said specialty stores have posted three consecutive months of strong sales, averaging 0.8 percent a month.
“Certainly the trajectory looks good,” Hoyt said. “The question to some degree is how much this latest growth is [pent-up demand] from the winter weather and how much of it is a fundamental acceleration in spending growth. I think consumer fundamentals support the latter.”
In the overall economy, retail sales increased 1.2 percent to $444.9 billion, generally in line with expectations.
“In May, consumers came back with a vengeance,” said Chris G. Christopher Jr., director of U.S. consumer economics at IHS Global Insight. “Retail gains were broad-based and relatively robust. Autos, discretionary spending, and building material and garden supply stores did very well. Grocery stores and restaurants were above water, but not as strong. In addition, the April retail sales figures were revised upward.”
IHS is changing its second-quarter forecast on real consumer spending growth to 2.5 percent from 2.2 percent as a result of the report, Christopher said.
“The May retail sales report indicates that consumers are starting to use some of their so-called gasoline price dividend at the shopping mall,” he said. “There were several other positive signs on the consumer front for the month of May, as well, including a well-received employment report, robust light-vehicle unit sales and an increase in the Conference Board’s Consumer Confidence Index. “
“This is positive news for retailers since it suggests consumer spending momentum as the back-to-school shopping season approaches,” Christopher said.