June 12 - May retail sales missed forecasts, but an upward revision for April makes the quarter the strongest for retail sales in two years. Bobbi Rebell reports.
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The sun came out in May but the consumer didn't shop as much as had been expected.
May retail sales up just 0.3 percent- half the 0.6 percent forecast.
But April showers weren't as bad as first reported- that month was revised upwards.
A lot of the sales, though, have been cars. Take that and other highly volatile components like food out, and so-called core retail sales were unchanged.
Chris Christopher is head of consumer economics at IHS Global Insight:
SOUNDBITE: CHRIS CHRISTOPHER, HEAD OF CONSUMER ECONOMICS AT IHS GLOBAL INSIGHT (ENGLISH) SAYING:
"There is some pent-up demand being released on the auto front but have in mind when people plop down money for a down payment for that new automobile they are not going to go rushing off to a fancy restaurant or buying that electronic gadget that might cost $200. They are going to be a little more cautious on discretionary items."
Rising oil prices could also hamper spending.
Barclays Michael Gapen:
SOUNDBITE: MICHAEL GAPEN, SENIOR ECONOMIST, BARCLAYS (ENGLISH) SAYING:
"Geopolitical events like we've seen in Iraq which would lead to sharply higher oil prices is something that would feed back into the U.S. economy in a negative way because it would mean consumers now have to spend more on gas and energy than they did before, leaving less to spend elsewhere. So in our minds a sharp rise or a shock to oil prices and energy prices would be the main risk for the growth outlook in the U.S."
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.
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