Retail sales climbed in May as shoppers returned to stores and malls, signaling a stronger rebound to the economy during the summer.
Sales jumped 1.2 percent last month from April, the Commerce Department said Thursday. Stripping out the volatile category of motor vehicles and parts, retail sales rose 1 percent. April sales, initially reported as flat, were revised upward to 0.2 percent.
Economists said the sales boost reflected improvements in other areas of the economy.
“With income, employment and consumer confidence all improving, consumers were encouraged to open their wallets this spring,” Jack Kleinhenz, chief economist of the National Retail Federation, said in a statement. “On the whole, sales are growing at a reasonable pace and regaining momentum.”
Consumers have spent cautiously in recent months, even as they pocketed savings from dropping gas prices. Many analysts said stagnant wage growth was discouraging people from shopping.
“We expect stronger sales growth as jobs and income pick up,” Kleinhenz said. “Nonetheless, stronger wage growth is needed to sustain further gains in retail sales.”
Consumer spending makes up more than two-thirds of economic output, making retail sales a strong gauge of the nation’s economic health. Sluggish retail sales in recent months also reflect a slower pace of growth in the overall economy.
Eleven out of the Commerce Department’s 13 categories reported growth in May.
Building material and garden suppliers, boosted by warm weather, said sales rose 2.1 percent. Furniture retailers climbed 0.8 percent. Gas stations increased 3.7 percent, reflecting an overall increase of prices at the pump.