Core retail sales in May rose 0.5% from April, and 3.2% year over year, the U.S. Commerce Department said on Friday. Nonstore (mostly e-commerce) sales rose 1.4% month over month and 11.4% year over year, according to the monthly report. April's number was upwardly revised to a 0.3% increase from the previously calculated 0.2% decline.
Monthly gains were "broad-based," as Wells Fargo Senior Economist Tim Quinlan noted in an email to Retail Dive. Furniture and home stores rose 0.1%, electronics sales 1.1%, general merchandise retailers 0.7%, and sporting goods and hobby stores 1.1%, the government said. But department stores fell 0.7% and apparel sales were flat, according to the report.
The release formed the basis for the National Retail Federation's own number crunching. The trade organization said that retail sales rose 0.5% in May seasonally adjusted from April and 3.2% unadjusted year over year, according to an emailed release.
At a time when tariffs, actual and potential, are setting retail executives' teeth on edge and threatening to spike consumer prices, the Commerce Department's report provided some welcome relief.
That goes for the government's results for April as well as May, analysts said. "Both results represent solid overall underlying trends, with the adjusted & unadjusted stacks equating to their highest levels since late 2018," UBS Analyst Michael Lasser said in comments emailed to Retail Dive. "Overall, we think these results suggest consumer spending remains strong amid the looming uncertainty with tariffs."
NRF Chief Economic Jack Kleinhenz went so far as to say the report, its revision included, foretells an economic surge. "Today's retail numbers, and upward revisions to prior months, reinforce the ongoing strength of the consumer and are consistent with a pick up in the pace of the economy in the coming months," he said in a statement. "The strong job market, recent income gains and elevated confidence translates into ongoing support for spending. Households, in the aggregate, are in solid financial condition but an escalation in trade tariffs will undoubtedly create a considerable downdraft to confidence and spending, or lead to a pullback in spending."
At least, the two metrics demonstrate, "that consumer spending is still on the uptick and the fear of a slowdown in consumer confidence is premature," Moody's Investors Service Vice President Mickey Chadha said in a statement emailed to Retail Dive, pointing to certain sectors that will benefit the most. "We continue to believe retail sales growth for 2019 will be in the 4.5% range led by e-commerce players like Amazon, off-price retailers like TJX, value and convenience oriented retailers like Dollar General, discounters and warehouse clubs like Walmart and home improvement retailers like Home Depot. Continued strong macroeconomic trends are also expected to remain in place with low unemployment and wage growth continuing to bolster retail sales."
Wells Fargo Senior Analyst Zachary Fadem was more circumspect, writing in a client note Friday that, "May retail sales support cautious optimism" and noting, "While most signs point to Q2 starting off challenging (weather, company outlooks, tough compares, etc.), May retail sales were more encouraging than we expected."