US retail sales surged in May as households boosted purchases of automobiles and a range of other goods. According to the Commerce Department, May sales increased 1.2 percent after 0.2 percent gain in April.
Retail sales excluding automobiles, gasoline, building materials and food services expanded 0.7 percent last month, higher than April’s 0.1 percent rise. According to analysts, supported by high saving, rising house prices and a recovering labour market, consumer spending is likely to remain strong in the upcoming months.
Sales at service stations rose 3.7 percent, reflecting a rise in gasoline prices, while sales at electronic and appliance stores gained 0.1 percent. Receipts at furniture stores on the other hand, increased 0.8 percent.
In a separate report also released by the Commerce Department, business inventories rose 0.4 percent in April, posting the largest gain since May 2014. Inventories are among the key components of gross domestic product (GDP).
Meanwhile, even though the weekly applications for US unemployment aid ticked up to 279,000 last week, the number remained in historically low levels. Last week the government reported that 280,000 jobs were created in May, up from 221,000 in April.
Combined with other positive figures from today, the US economy proves itself to be on the right track, which could prompt the US Federal Reserve to raise interest rates later this year.
Dollar rallied against a basket of currencies on the strong retail sales data, while US stocks traded higher on Thursday.