Retail sales in the U.S. rose by slightly more than expected in the month of May, according to a report released by the Commerce Department on Thursday, with auto sales showing a notable increase.
The report said retail sales increased by 0.6 percent in May after edging up by 0.1 percent in April. The sales growth came in just above economist estimates for a 0.5 percent increase.
The slightly stronger than expected sales growth was largely due to a jump in sales by motor vehicle and parts dealers, which surged up by 1.8 percent in May following a 0.7 percent increase in April.
Chris Low, chief economist at FTN Financial, said, "Cars are among the most interest rate sensitive areas of the economy. The decent May sales gain suggests the recent backup in rates has not hurt them yet, though the story may change in June."
"For now, however, car sales and retail sales in general are decent, suggesting consumers are recovering from the pain of higher taxes," he added.
Excluding the increase in auto sales, retail sales increased by a more modest 0.3 percent in May after coming in unchanged in the previous month. The increase in ex-auto sales matched economist estimates.
Core retail sales, which exclude autos, gasoline, and building materials, also rose by 0.3 percent in May compared to a 0.2 percent increase in April.
The report showed a 1.2 percent increase in sales by miscellaneous store retailers as well as more moderate increases in sales by building materials and supplies dealers, grocery stores, and sporting goods, hobby, book and music stores.
Meanwhile, sales by furniture and home furnishings stores fell by 0.8 percent and sales by electronics and appliance stores dropped by 0.4 percent. Sales by gas stations edged down by 0.2 percent.
The Commerce Department noted that total retail sales in May were up by 4.3 percent compared to the same month a year ago.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.