Retail sales rise much more than expected

WASHINGTON (Reuters) - Total sales at U.S. retailers rose a full percentage point in May as many consumers had more spending cash in their wallets from government rebate checks, a report on Thursday showed.

The Commerce Department reported an increase last month that was twice as much as expected by Wall Street economists polled before the report. Taking out the higher prices consumers paid for gasoline, sales still rose by a strong 0.8 percent, the biggest increase in a year.

Economists were expecting to see a boost in spending during the month because a large portion of government rebate checks, which are a key part of the president's economic stimulus package, have been distributed.

Excluding autos, sales rose 1.2 percent, the biggest rise in six months and well beyond the 0.7 percent rise economists were expecting.

Taking out autos, building materials and gasoline, sales rose a steady 0.8 percent during the month.

(Reporting by Joanne Morrison; Editing by Neil Stempleman)