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Consumer Spending Posts Solid Gains Year Over Year
Consumer spending sounded an encouraging note, with the Commerce Department reporting strong retail sales for May and revising April’s estimates upward. The $519-billion spend at retailers during May represented a 0.5% increase from April and a 3.2% gain from the year-ago period.
“The consumer is firmly back on track: the first quarter’s softness was misleading,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told Marketwatch. However, Marketwatch’s consensus of analysts had predicted a 0.7% increase from the previous month.
The strong showing by consumers could mean the Federal Reserve can wait a little longer before cutting interest rates, Marketwatch reported. The Fed had been expected to start lowering rates at the July meeting of the Federal Open Market Committee.
Most categories of retail goods saw increases during May, aside from department stores, clothing and food and beverage. The strongest year-over-year increase, though, was posted by “nonstore” retailers, i.e. e-commerce channels, which were up 11.2% Y-O-Y. Nonstore volume was also up 1.4% over the prior month.
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- ◦Economy
