RETAIL sales up tiny 0.1 percent in May - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

RETAIL sales up tiny 0.1 percent in May

Updated:

WASHINGTON (AP) _ After shopping up a storm in April, consumers were more tightfisted in May, boosting sales at the nation's retailers by a tiny 0.1 percent.

The smaller-than-expected increase in retail sales followed a big, 1.4 percent jump in April, according to revised figures, the Commerce Department reported Wednesday. Many analysts were forecasting a 0.3 percent rise in retail sales for May.

Economists were predicting that consumers would be more selective shoppers in May, given the weakening labor market, higher energy costs and lingering concerns from consumers about the economy's prospects.

In May, consumers cut back on purchases of cars, clothing, building supplies and electronics. But they spent more on gasoline, furniture and sporting goods.

In an effort to stave off recession, the Federal Reserve has slashed interest rates five times this year, driving down borrowing costs for millions of Americans to the lowest point in seven years.

The Fed hopes its rate cuts will spur spending by consumers and investment by businesses, thus boosting economic growth.

Consumer spending, which accounts for two-thirds of all economic activity, has held up during the economic slowdown, which began in the second half of last year.

But some economists worry that consumers might sharply cut back spending and tip the economy into recession should the labor market seriously deteriorate in the coming months. Others say consumer spending won't collapse and will be boosted later in the year from tax-cut refund checks expected to arrive in mailboxes between late July and September.

In May, sales of cars and automobile parts fell by 0.7 percent, after a 2.3 percent gain. Excluding this category, overall sales rose 0.3 percent, slightly less than many analysts were forecasting.

Sales at clothing stores declined by 1 percent, after a 0.6 percent increase in April. At general merchandise stores, including department stores, warehouse clubs and superstores, sales fell by 1.3 percent, down from a 2.6 percent rise.

Sales at building supply stores dipped 0.6 percent in May, following a 3.3 percent gain, and sales at electronics and appliances shops slipped 0.1 percent, on top of a 0.6 percent drop in April.

These declines blunted gains elsewhere.

Sales at gasoline stations rose 1.4 percent in May, following a 4.2 percent increase. The figures, which aren't adjusted for inflation, reflect higher prices at the pump.

Furniture sales rose 1.2 percent, after a 0.2 percent drop in April. Sales of sporting goods, books and music increased 1.5 percent, up from a 0.1 percent rise. At bars and restaurants, sales went up 1 percent, following a 0.2 percent increase. Sales at pharmacies and drug stores rose 1.1 percent, after a 0.1 percent dip.

Wednesday's monthly retail sales report is the first using a more detailed system for classifying businesses that are tracked by the government.

For instance, electronics and appliance stores are now broken out, rather than being embedded in a broader category. Bars and restaurants continue to be included but in a new category of ``food services.''

Last week, the nation's largest retailers reported disappointing sales in May, after experiencing a bounceback in April. Chains such as Target and Kohl's said sales were below expectations. Clothing stores, particularly the Gap and Ann Taylor, and the big department store chains fared the worst.

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