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Economy in Brief

U.S. Retail Sales Firmed
by Tom Moeller June 12, 2008

U.S. retail sales last month were stronger-than-expected, boosted by early receipts of the government's tax rebate checks - $600 per person and $300 per child for families. A 1.0% May jump in sales followed an upwardly revised 0.4% April increase, initially reported as a 0.2% decline. On a three-month basis overall retail sales were down 2.0% (AR).

Sales of motor vehicles & parts ticked up 0.3% (-7.0% y/y) following three months of decline. The increase accompanied a 1.1% decline in unit motor vehicle sales.

Retail sales excluding autos rose 1.2% and the April rise of 1.0% was double last month's estimate. The gain also exceeded Consensus expectations for a 0.6% increase.

Higher prices for gasoline boosted sales at service stations by 2.6% (13.8% y/y). Nevertheless, less gasoline & autos, retail sales still surged 1.0% (3.7% y/y) and the April increase was about doubled to 1.1% (3.7% y/y). On a three-month basis these sales jumped at a 10.7% annual rate.

May sales of nonstore retailers (internet & catalogue) surged 1.6% (10.0% y/y) after very much upwardly revised gains during the prior two months of 3.2% and 1.7%.

Sales of discretionary items improved. Sales at general merchandise stores surged 1.2% (5.1% y/y) following gains between 0.4% and 1.0% during the prior three months.Furniture, home furnishings & appliance store sales rose 0.6% (-0.7% y/y) for the second month. The gain, however, followed four months when sales were unchanged or down. The rise reflected higher sales of electronics & appliances which rose 0.7% (3.7% y/y) after a 1.1% April jump. Sales of furniture & home furnishings increased just 0.4% (-4.9% y/y) after a year of monthly declines. Apparel store sales rose 0.5% (-0.1% y/y) but the April increase was lessened to 0.1%.

Building materials & garden equipment sales surged again by 2.4% (-3.2% y/y) following a like increase during April.

Restaurant and drinking places sales also jumped, by 0.8% (5.1% y/y) last month after an upwardly revised 1.2% increase.

The latest Beige Book covering regional economic conditions from the Federal Reserve Board can be found here.

  May April Y/Y 2007 2006 2005
Retail Sales & Food Services 1.0% 0.4% 2.5% 4.0% 5.8% 6.4%
  Excluding Autos 1.2% 1.0% 4.9% 4.5% 6.8% 7.5%
    Less Gasoline 1.0% 1.1% 3.7% 4.1% 6.2% 6.4%
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