The U.S. Department of Commerce reported higher retail sales in May, rising 1 percent compared with April, double the reported predictions by several economists. Seeing one of the biggest spikes in sales, building materials retailers and garden supply stores recorded a 2.4 percent month-over-month gain. The only retailers beating those home channel companies were gas stations, with a 2.6 percent spike in sales.
Furniture and home furnishings retailers did not fare as well, but still saw sales rise 0.4 percent. General merchandise stores, such as Wal-Mart and Sears, were up 1.2 percent month-over-month, and sales at electronics and appliances stores rose 0.7 percent.
Stimulus checks have been credited for the unexpected spike. Many companies opted to offer promotions around the rebates, which still are being issued. Home Depot prominently featured a promotional ad campaign in May encouraging taxpayers to invest stimulus checks into environmentally friendly products. Checks began mailing in April, with a large chunk of payments falling in May. Payments issued during those periods represented about $50 billion, or roughly half the expected total stimulus payouts to be given this year.
The New York Times reported that some economists are excited about the news, such as Nigel Gualt, an economist with forecasting firm Global Insight. “The May retail sales report has dramatically changed the landscape,” he said. “Consumer spending has held up much better than gloomy sentiment surveys would suggest.”