Retail sales jumped higher in May as consumers returned to stores as coronavirus lockdowns were lifted across the United States.
Retail sales surged 17.7 percent compared with the prior month, according to Commerce Department data released Tuesday, easily beating expectations for an 8 percent gain.
Retail sales are now down 6.1 percent compared with a year ago following the month to month 8.3 percent decline in March and April’s 14.7% dive.
Still, the better than expected figures for May indicate that consumers are confident enough about the economy and the pandemic to spend their income. The report also suggests that elevated unemployment benefits and other payments from the U.S. government are working to boost demand.
The economy appears to be bouncing back from the sharpest downturn on record. In May, businesses added 2.5 million jobs and the unemployment rates declined from the record-high hit in April.
Excluding autos and gas station purchases, retail sales were up 12.4 percent, also a record increase.
The numbers indicate a high degree of “pent-up demand.” Clothing and accessories stores, many of which were closed in March and April, reported the biggest percentage gain at 188 percent. Furniture stores sales rose 89.7 percent.
Sales at sporting goods stores, hobby shops, musical instruments stores, and book stores jumped 88.2 percent. Sales at restaurant and bars rose 29 percent. Sales at electronics and appliances stores rose 50.5 percent.
Retail sales make up roughly half of all consumer spending. The rest of consumer spending goes into services such as home care, internet and cable services, gym memberships, and child care. Consumer spending accounts for about 70 percent of gross domestic product in the U.S.
–The Associated Press contributed to this report.