(Adds details, analyst comments, updates markets)
* Retail sales up 0.3 percent in May, prior month revised up
* Core sales unchanged, April sales revised higher
* Weekly jobless claims rise 4,000 last week
* Big rise in inventories supports growth outlook
By Lucia Mutikani
WASHINGTON, June 12 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
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.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Tim