WASHINGTON U.S. 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.
U.S. stocks were trading lower, while U.S. Treasury debt prices rose modestly. The dollar slipped against a basket of currencies.
So-called core retail sales, which strip out automobiles, gasoline, building materials and food services, and correspond most closely with the consumer spending component of gross domestic product, were unchanged last month.
However, they were revised to show a 0.2 percent rise in April, instead of the previously reported 0.1 percent dip. Economists said retail sales were up at a 9.2 percent annualized pace over the last three months.
"This points to ongoing solid momentum in personal spending in the second quarter, which we currently peg at a rate around 3.25 percent," said Anthony Karydakis, chief economic strategist at Miller, Tabak in New York.
In May, consumers bought automobiles, building materials and garden equipment, as well as furniture. They also shopped online. However, there were modest declines in sales at sporting goods shops, electronics and appliances stores, as well as at clothing retailers and restaurants and bars.
Another report from the Labor Department showed little signs of imported inflation, with import prices edging up 0.1 percent last month. In the 12 months through May, import prices increased 0.4 percent, advancing for the first time since July.