Growing Consumer Confidence, Spending Accelerate May Retail Sales

May retail sales (excluding automobiles, gas stations and restaurants) increased 0.6 percent seasonally adjusted from April and increased a strong 4.8 percent unadjusted year-over-year, according to data released by the U.S. Department of Commerce.

The National Retail Federation attributes the increase to improved consumer confidence and spending.

“The American consumer continues to drive the U.S. economy,” NRF President and CEO Matthew Shay said. “In spite of fluctuating gas prices, severe weather in much of the country and fiscal policy uncertainty, consumers continue to demonstrate an inherent resiliency and flexibility.”

The increased consumer spending was also felt in the home improvement industry: Building material and garden equipment and supplies dealers stores’ sales increased 0.9 percent seasonally-adjusted and increased 9.3 percent unadjusted year-over-year.

“Stronger employment data and increasing home and equity prices lifted confidence and spending this spring,” NRF Chief Economist Jack Kleinhenz said. “The economy is improving, albeit slowly, but we still have a long way to go. Stagnant salaries continue to constrain further economic acceleration. While sequester and tax increases dampened sales growth in the first quarter, it appears that the economy absorbed most of the blow.”

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