Rise in Retail Sales Largest in Four Month

Washington, DC, June 11, 2009--Retail sales rose by the largest amount in four months in May, according to the Commerce Department.

The government said Thursday retail sales increased by 0.5 percent last month, in line with economists' expectations. It was the largest increase since sales surged by 1.7 percent in January following six straight declines.

The May advance could be another signal that the worst of the recession is over. However, the all-important consumer sector is not expected to come roaring back, given all the troubles facing households as the country slogs through the worst recession in decades.

The 0.5 percent May increase followed two straight declines including an April drop of 0.2 percent, which was originally estimated as a larger 0.4 percent fall.

Auto sales rose by 0.5 percent last month, the best showing since a 2.7 percent surge in January. Even with the gain, sales are still 21.5 percent below where they were a year ago as auotmakers continue to struggle with the worst sales environment in decades. In an effort to spur demand, automakers have stepped up their incentive offers.

Excluding autos, retail sales were up 0.5 percent in May, better than the 0.2 percent gain that economists had been expecting.

Much of that strength, however, came from a 3.6 percent jump in sales at gasoline service stations, an increase which reflected in large part rising gasoline prices. The retail sales are not adjusted for inflation.

Sales were also up at hardware stores, grocery stores and and health stores.