US retail sales rose 0.5% in May, led by online shopping

Americans stepped up their retail spending last month, a sign that low unemployment and modest wage gains are encouraging consumers to shop.

The Commerce Department said Friday that retail sales rose 0.5% in May, after a smaller gain of 0.3% in the previous month. April’s figure was revised up from an earlier estimate that had showed a decline.

The figures suggest that Americans remain confident enough in the economic outlook to spend. In June, the economy reached its 10th year of expansion, tying the 1990s as the longest on record. Measures of consumer confidence, after stumbling this spring amid the ongoing U.S.-China trade war, have returned to nearly 19-year highs.

Sales at electronics stores jumped 1.1% and rose 0.7% at auto dealers. Sales in a category that mostly includes online retailers rose 1.4%.

Retail sales have been choppy this year, making it harder for economists to get a handle on consumer spending. But with the unemployment rate at a five-decade low of 3.6% and wage gains easily outpacing inflation, most analysts expect consumer spending to keep growing at a decent pace this year.

Still, the economy is forecast to slow in the April-June quarter, expanding at roughly a 2% annual pace or less, analysts expect. That’s down from 3.2% in the first three months of this year.

Retail spending was healthy in many categories. Restaurants and bars reported that spending rose 0.7%, a good sign because such spending is more discretionary than purchases at grocery stores or gas stations. Sporting goods and hobby stores saw sales rise a strong 1.1%.

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