Shoppers buck trend, spend more in May
NEW YORK — Americans loosened their purse strings in May, but it may have been a temporary splurge.
Some major retailers such as Target and Macy’s on Thursday posted sales increases that beat Wall Street estimates as shoppers were lured in by Mother’s Day promotions and colorful new styles of clothing. The gains follow a dismal showing from the month before
Still, it may not be time to celebrate just yet. Revenue growth remains down from earlier in the year and worries about the global economy are starting to escalate again.
Michael Niemira, chief economist at the International Council of Shopping Centers, said while May’s results are encouraging, he thinks troubling economic data will continue to weigh on consumers’ minds in the months ahead.
“There’s something out there that’s worrying consumer,” he said.
Only a handful of retailers representing roughly 13 percent of the U.S. retail industry report monthly sales figures based on stores open at least a year, which is a key measure of health because it excludes the impact of newly opened and closed stores. But economists watch the numbers because they offer a snapshot of consumer spending, which accounts for more than 70 percent of economic activity.
On average, retailers posted a 4 percent rise in May for revenue at stores open at least a year, according to the international shopping trade group. That’s better than the 3.6 percent analysts were expecting. It’s also up from the 2.4 percent in April — the worst monthly performance since November 2009.
But the latest results seem to fly in the face of negative economic news.
The Commerce Department said Thursday that the U. S. economy grew at an annual rate of 1.9 percent in the first three months of the year, which was slower than expected. Growth of 2.5 percent is typically enough just to keep pace with population changes. The Labor Department also reported that the number of Americans seeking unemployment benefits rose last week to a five-week high, evidence that the job market remains sluggish.
And earlier in the week, the Conference Board said its consumer confidence index had its biggest decline in eight months. That ends a period of steady optimism among consumers: The figure is now at the lowest level since January.
Carla Barnes, a 39-year-old public relations manager from Waleska, Ga., said Thursday that spending money on clothing is stressful at a time when groceries are more expensive and salaries aren’t keeping pace with the cost of living. Still, she shopped in May.
“I frankly wanted to get the stuff early because of the large selection right now,” she said.