Retail sales miss expectations, jobless claims rise
WASHINGTON — Retail sales rose less than expected in May, and first-time applications for jobless benefits increased last week, but the data did little to alter views the economy is regaining steam.
The Commerce Department said on Thursday that retail sales gained 0.3 percent. While that was below the 0.6 percent rise expected on Wall Street, April sales were revised higher to show a 0.5 percent increase, helping to keep growth forecasts intact.
“The continued gains during the first two months of the second quarter suggests that consumers are continuing to hold their side of the bargain, building on the strong momentum at the end of the last quarter,” said Millan Mulraine, deputy chief economist at TD Securities in New York.
In a separate report, the Labor Department said initial claims for state unemployment benefits climbed 4,000 to a seasonally adjusted 317,000 for the week ended June 7.
Despite the rise, claims are not too far from their pre-recession lows and job growth continues at a steady clip.
The government said last week the economy added 217,000 jobs in May, the fourth straight month of gains above 200,000, and has recouped all the 8.7 million jobs lost during the recession.
Along with signs of a strong expansion in the manufacturing and services sectors, the jobs data bolstered expectations for a big snap back in growth after a dismal first quarter in which the economy contracted at a 1.0 percent annual rate.
While a few economists trimmed their second-quarter gross domestic product estimates slightly on the retail sales data, most continue to expect a strong rebound with growth estimates ranging between a 3 percent to 4 percent pace.
The lofty forecasts were supported by another Commerce Department report showing business inventories recorded their biggest increase in six months in April.