Strong Job Market Buoys US Retail Sales

US retail sales rose in May amid a strengthened job market and growth in salaries, which boosted consumer spending.

Revenue increased 0.3% versus the previous month to $686.6 billion — adjusted for seasonal variation — compared with a 0.4% hike in April, according to data the US Census Bureau released last week. Sales also benefited from competitive pricing and nice weather.

“Consumers continued to spend on household priorities in May, supported by gains in the job market and wages,” said National Retail Federation (NRF) CEO Matthew Shay. “Retailers recognize the ongoing pressure on cost-sensitive consumers and are offering competitive pricing, a wide product mix and convenient shopping options to help stretch family budgets.”

Sales climbed 1.6% from the same month in 2022, up from April’s 1.2% year-on-year increase, the NRF noted. The federation expects sales to continue to rise.

“This was a positive report, with no sign of an abruptly slowing economy despite what has happened with inflation and interest-rate pressures,” explained NRF chief economist Jack Kleinhenz. “May is typically a strong month for retail as spring shopping hits its peak, but above-average temperatures and below-average precipitation no doubt played a favorable role.”

In May, sales advanced year on year in six of the nine categories the US Census Bureau monitors. The clothing and accessories segment — which includes jewelry — slipped 0.2% and was flat from April. Online sales across all products grew 9% relative to a year ago and gained 0.3% compared with the previous month.