Retail sales showed promise in May with some assistance from car-buying consumers.
Consumer spending increased 0.3 percent in May, according to a new report from the Commerce Department. The sales increase in May follows a 0.5 percent rise in April and 1.5 percent growth in March. Three months of consumer spending increases are good for the economy, but the May numbers were lower than what economists were hoping for. According to a poll conducted by Reuters, respondents believed sales would grow 0.6 percent for the month. Although the sales increase over the past month was a bit under expectations, economists only see this as a hiccup.
One area of the economy that showed healthy growth over the past month was auto sales. The Commerce Department reported auto sales rose 1.4 percent in May. This comes after the auto industry reported sales in May were the highest they had been in nine years. The jump in sales is primarily due to a higher demand for pickup trucks and SUVs.
Sales also fell below expectations for clothing and electronics stores, but these industries posted a gain of 0.6 percent in May. Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi UFJ, said that sales increases are good, even if the numbers fall below expectations.
"Consumers have not bought this much from your friendly neighborhood retailer or from over the internet up in the clouds since early 2012," Rupkey said. "Consumers may have dialed it back a touch in May, but overall spending for the second quarter is through the roof."
Economists are optimistic about activity for the rest of the year, as the overall economic growth is projected to be 3 percent, according to the Associated Press.