Retail sales climb 0.5 percent in May

06-12-2009 | AP

Increase mostly due to a 3.6% jump in sales at gasoline service stations

Panama Star WASHINGTON. R etail sales rose by the largest amount in four months in May, as a rebound in demand at auto dealerships and gas stations helped to offset continued weakness at department stores.

The Commerce Department 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.

Much of the 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.

Those gains helped to offset a 0.2 percent drop at general merchandise stores, a category which includes department stores and big retail chains such as Wal-Mart.