U.S. retail sales surge in May on stimulus cheques
Cash registers hummed in the United States in May as retail sales shot up by one per cent, double what economists had been forecasting.
The U.S. Commerce Department said Thursday that the retail activity for the month is the biggest increase since November 2007.
The increase came after the U.S. government issued 57 million rebate cheques to consumers to stimulate the economy.
Economists said the rebate cheques should give the economy a short-term boost.
"We expect this level of retail activity to ease somewhat after the rebate cheques get spent, with consumer spending retuning to softer levels in the second half of the year," said Millan Mulraine, economics strategist at TD Securities, in a commentary. "Nevertheless, this heightened level of consumer spending will certainly provide some much needed boost to the U.S. economy in [the second quarter]."
The U.S. government reported that sales at general merchandise stores, such as department outlets and discount stores, grew by 1.2 per cent — their best performance since March 2007.
Auto sales were up by 0.3 per cent in May, but that was a turnaround from April's decline of 2.1 per cent.
Rising gasoline prices helped push sales at service stations up by 2.6 per cent.
Factoring out gasoline prices, overall retail sales would have risen by 0.8 per cent.
With files from the Associated Press
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