WASHINGTON (AP) – Consumers brushed off rising gasoline prices and slumping home sales to storm the malls in May, pushing retail sales up by the largest amount in 16 months.The Commerce Department reported that retail sales surged by 1.4 percent last month, compared to April, double the increase that analysts had been expecting. Retail sales had fallen by 0.1 percent in April.
The May strength was widespread with auto dealers, department stores, specialty clothing stores and hardware stores enjoying an especially good month.
Sales would have been strong even without last month’s big jump in gasoline prices, which saw prices top $3.20 per gallon. Excluding sales at gasoline stations, overall retail sales would still have been up 1.2 percent.
Meanwhile, the Federal Reserve reported Wednesday that the economy headed into the summer with strong momentum, bolstered by consumer spending and a rebound in manufacturing.
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The strong showing for retail sales caught analysts by surprise. They had been forecasting a more moderate rebound of 0.7 percent.
Have you noticed they keep under-estimating the economy? I blame the Bush tax cuts. The suppose it economic experts, still haven’t figured out, the total effect of such tax cuts on the economy. But the results, are undeniable.
