Retail Sales Beat Expectations

The Census Bureau Retail Sales figures were released earlier this morning, showing an increase of 1.2 percent for May, beating expectations of a 1.1 percent increase. Auto sales were a key component in the beat, rising 2 percent. Gasoline sales were also strong, rising 3.7 percent, based mostly on the increase in the price of gasoline. Excluding gas and auto sales, retail sales rose 0.7 percent in May, better than the expected rise of 0.5 percent. Clothing stores saw a sharp increase in spending of 1.5 percent, while bar and restaurant spending cooled to only a slight rise of 0.1 percent. Thursday's results are in contrast to weak April numbers, when total retail sales rose only 0.2 percent. According to Bloomberg News, the strong May retail sales number is leading some analysts to up their estimates slightly for second quarter GDP growth, after lowering the GDP growth forecast following April's weak retail sales figures. On the back of the release, S&P 500 futures rallied slightly. Bond futures also moved somewhat after the release, with the yield on the US Treasury 10 year is currently at 2.43 percent, down from an earlier 2.48 percent.