U.S. Retail Sales rises, Jobless claims drops
By Zarana on Wednesday, June 17 2009
U.S. Retail Sales rose in May for the first time in three month and new claims for jobless benefits last week hit January low, fueling hope of improving national economy.
The Commerce Department said on Thursday that U.S. Total Retail Sales rose 0.5 percent in May 09, owing to strong gasoline prices, after falling by 0.2 percent in April. Also, a report from the Labor Department showed the number of U.S. workers filing new claims for unemployment benefits fell by 24,000 to 601,000 last week, the lowest since the week of Jan. 24.
Tax breaks and income supplements from the Federal administration’s stimulus plan are also propping up demand, even as the need to boost savings sustained gains in spending will be slow to develop. But there are worries that higher gasoline prices, which boosted retail sales in May, could hurt the economy. Gasoline prices rose every week in May, according to government data, increasing from $2.13 a gallon at the beginning of the month to $2.57 by June 1.
Excluding sales at gasoline stations, retail sales rose just 0.2 percent, after declining by 0.2 percent in April, the Commerce Department said. Additionally, Gasoline sales jumped 3.6 percent last month after dropping 0.8 percent in April, while sales of building materials climbed 1.3 percent, the biggest gain since April last year. Car sales rose 0.5 percent.
Consumer spending, which accounts for about 70 percent of U.S. economic activity, rose at a 1.5 percent annual rate in the January-March period after a 4.3 percent dive in the fourth quarter of last year.
But with confidence picking up and the pace of job losses showing signs of abating, analysts expect consumers to loosen their purse strings in the second half of the year. While initial claims for state unemployment insurance benefits declined for the fourth straight week last week, the number of people staying on the benefit rolls after collecting an initial week of aid rose to a record 6.82 million in the week of May 30.