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Strong Job Market Boosts May Retail Results

Jun 16, 2019 5:52 AM   By Rapaport News
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RAPAPORT... US retail sales rebounded in May as the economic and financial outlook stabilized, according to the National Retail Federation (NRF).

Total purchase value grew 3.2% year on year, with sales rising in nearly all categories, the trade organization reported last week. Retail sales increased 0.5% over the previous month, after the government revised its April data. It initially reported a 0.2% decline in April, which it updated to a rise of 0.3%. 

“[The figures] reinforce the ongoing strength of the consumer and are consistent with a pick-up in the pace of the economy in the coming months,” said NRF chief economist Jack Kleinhenz. “The strong job market, recent income gains and elevated confidence translates into ongoing support for spending.”

The general improvement follows a slowdown in sales at specialist jewelry stores in the first four months of the year. Combined sales for the store category in the January-to-April period declined 4.5% year on year, while April sales fell 2.3% over the previous year, according to data from the US Census Bureau. Jewelry figures for May are not yet available.

The NRF cautioned the future of retail could be unsteady due to an escalation in trade tariffs, which may lead to a “considerable” pullback in spending. Still, the Conference Board noted a more positive outlook as its Leading Economic Index — which forecasts future economic activity — rose 0.2% for the month.  

“Labor markets remain strong, with unemployment at its lowest rate since the 1960s,” it explained. “Wages continue to grow at an elevated pace and may even accelerate during the year. Correspondingly, consumer confidence has stayed at historically high levels. These factors should keep consumer spending growth at a healthy level.”

Image: Consumers shopping at a mall. (Libreshot)
Tags: Jack Kleinhenz, May Retail Sales, National Retail Federation, NRF, Rapaport News, the Conference Board, US Census Bureau
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