- Advance Retail Sales for May fell .5% versus estimates of a .2% decline and an upwardly revised 1.5% gain in April. Retail Sales Less Autos for May fell .2% versus estimates of a .2% increase and an upwardly revised 1.4% gain in April.
BOTTOM LINE: US wholesale prices declined more than forecast in May as costs fell for gasoline, computers and automobiles. This was the largest decline since April 2003. Prices of raw materials, used at the earliest stage of the production process, declined 2.0%. Food prices fell .3%, computer prices declined 4.8% and passenger car prices fell .2%. This is yet another measure of inflation showing substantial deceleration.
US retail sales fell by a larger-than-expected .5% in May, however an average gain of .5% over the last three months paints a healthy picture of consumer spending. Rising incomes, a booming housing market, a rebound in stock prices and gains from refinancing should lead to a continuation of recent strong trends. Stripping out autos and gasoline, retail sales were unchanged after rising a vigorous 1.3% the prior month. Consumer spending in the second quarter is projected to increase at a 3.2% pace, better than the 3.1% expected in a prior survey, according to the median forecast in a survey of 65 economists by Bloomberg.
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