US Retail Sales Rebound in May

RAPAPORT... US retail sales began a strong recovery in May as businesses started to reopen and consumers returned to spending, according to government data.While revenues slipped 6% year on year, they rose 18% compared to April, which had posted a record-setting 15% month-on-month drop, figures from the US Census Bureau showed.The National Retail Federation (NRF) warned May's figures could be imprecise, as many retailers were still closed and unable to respond to the Census Bureau's monthly survey."Today's sales report is very encouraging news at a time when we need to focus on what will happen as retail doors open once again," said NRF CEO Matthew Shay. "These sales numbers do not reflect the same strength we had going into the pandemic, but they certainly reflect the trajectory we need coming out of it. The most important thing now is to keep these retail stores open for business and not penalize them by closing their doors in the event of a coronavirus surge."Pent-up consumer demand, combined with government-issued stimulus money and unemployment checks, drove consumer spending, the NRF noted, adding that full recovery was still a long way off."Comparisons against April have to be taken in context because April was a full month when almost everything that wasn't deemed 'essential' was shut down," NRF chief economist Jack Kleinhenz said. "Spending has improved considerably, but it's still far below where it was a year ago, and while the free fall in consumer confidence is over, unemployment remains high and confidence is still at recession levels.... We are likely to remain on a roller coaster for a while."Every retail category saw month-on-month gains in May, with clothing and clothing-accessory stores up 188%, while furniture grew 90% and sporting-goods stores experienced an 88% rise.The NRF believes that if recovery continues at the current trajectory, the third quarter could see a turnaround in the economy, but that rebound could be thrown off by a new surge in coronavirus cases.Image: A woman wearing a face mask shopping in a mall. (Shutterstock)