WASHINGTON (AFP) — US retail sales surged a stronger-than-expected 1.0 percent in May as Americans splurged out more on gasoline and goods, a government report showed Thursday.
Spending on gasoline has been stoked by a sharp spike in fuel costs.
Core retail sales, which strip out vehicle sales, increased by 1.2 percent, the Commerce Department said in its monthly survey.
The readings are likely to bolster the positions of some economists who believe that the US economy will not slump into a recession this year. Total retail sales rang up 385.4 billion dollars during the month.
Other analysts believe a nagging housing downturn, a related credit squeeze and skyrocketing energy costs will pitch the world's largest economy into a downturn.
Although the headline number is buoyant, it also suggests that Americans' wallets are being stretched by rising gasoline costs which could crimp other spending.
The report's headline and core readings were stronger-than-expected. Most economists had predicted that retail sales rose 0.6 percent and that core sales increased 0.7 percent last month.
The gain in overall sales was the strongest since November.
The surge in retail sales comes as a 168-billion-dollar economic stimulus delivered tax rebates to millions of Americans. The administration of US President George W. Bush believes the stimulus will fire up consumer spending, a vital motor of economic growth.
Breaking down the report, gasoline sales jumped 2.6 percent last month compared with April. Sales have boomed 13.8 percent compared with a year ago.
Building and garden equipment sales rose a robust 2.4 percent during the month while general merchandise stores saw sales increase 1.2 percent.
Americans are being buffeted by strong economic headwinds, but the Federal Reserve has slashed borrowing costs in a bid to boost economic momentum.
Although spending on many categories showed improvements last month, recent reports from big US automakers have been depressed. Demand for large sport utility vehicles has slumped sharply as gasoline prices have soared higher.
Average gasoline prices have struck 4.00 dollars a gallon in many areas across the United States.
The government survey also showed that Americans have lost none of their legendary appetite for eating out, as restaurant and bar sales increased 0.8 percent.
Clothing and clothing accessory sales improved 0.5 percent while electronics and appliance stores reported a 0.7 increase in turnover.
The government revised its readings for April retail sales to reflect a stronger picture, saying sales had risen 0.4 percent compared with an initial estimate that they had declined 0.2 percent.
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