May retail sales jump, import prices up

NEW YORK (Reuters) - Total sales at U.S. retailers rose 1.0 percent in May as many consumers had more spending cash in their wallets from government rebate checks.

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.

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

U.S. import prices rose 2.3 percent in May as expected, capping the biggest three month increase in more than 17 years, as petroleum import prices climbed, a government report showed on Thursday.

The number of U.S. workers filing new claims for jobless benefits rose more than expected last week. Initial claims for state unemployment insurance benefits jumped to 384,000 in the week ended June 7 from a revised 359,000 for the prior week, the Labor Department said.

The four-week average of new jobless claims, which is considered a more accurate measure of employment trends since it evens out weekly volatility, climbed to 371,500 from a revised 369,000 in the prior week.

COMMENTS:

JOHN O'BRIEN, SENIOR VICE PRESIDENT, MKM PARTNERS LLC, CLEVELAND, OHIO:

"The consumer is someone who continues to buck the trend of $4 (a gallon) gasoline and an inability to use their homes as a second bank account."

"I think some of the advance (in retail sales) might have been due to the stimulus checks going out ... "It seems to

Wal-Marts and Cotstcos seem to reaping the benefits of those checks."

"I think the combination of strong retail sales and oil trading $3.00 lower should bode well for the (stock) market today."

DAVID POWELL, CURRENCY STRATEGIST, BANK OF AMERICA, NEW YORK:

"The data is certainly dollar-positive. Everyone was focused on the ex-autos gas component and thought this item would be inflated by high gas sales, but it doesn't seem to be the case. The report shows strength in consumer spending which is probably due to the tax rebate checks. We're seeing the fiscal stimulus coming into the economy and seeing the effect on the retail sales data."

CARL LANTZ, U.S. INTEREST RATE STRATEGIST AT CREDIT SUISSE IN NEW YORK:

"These retail sales numbers were very strong relative to the consensus and are definitely weighing on the Treasury market. In fact, some of the stimulus cheques got spent."