Retail sales up in May

Retail sales rose in May for the first time in three months, an increase driven by shoppers returning to automobile showrooms seeking bargains.

Retail sales rose 0.5%, as forecast, after a 0.2% drop in April, the Commerce Department said. Sales excluding autos also increased 0.5%, led by gasoline as prices jumped last month. A separate report showed that claims for jobless benefits fell last week.

“It’s indicative of a bottoming-out process, but we don’t have much forward momentum to speak of,” said Jonathan Basile, an economist at Credit Suisse Holdings Inc. in New York. “The consumer is not ready to spend in earnest yet because of the weak job and income environment.”

U.S. household wealth fell in the first quarter by $1.3 trillion, extending the biggest slump on record, as home and stock prices dropped, according to the Federal Reserve in another report. The decline was the sixth straight.

The number of Americans filing claims for unemployment insurance fell for the third time in four weeks, to 601,000, lower than economists had forecast. The number of jobless continuing to collect benefit payments still rose to a record for the 19th straight week to 6.82 million.

Inventories at U.S. businesses fell in April for an eighth straight month, the longest stretch since 2002, as companies cut back. Sales fell 0.3%, the Commerce Department said. The 1.1% decline in stockpiles followed a revised 1.3% drop in March.

Economists had forecast that retail sales would rise after a 0.4% drop in April. Estimates ranged from a drop of 0.3% to an increase of 1.4%.

Excluding autos, sales were projected to rise 0.2% after a 0.5% drop a month earlier, according to the survey.

Car dealers were among the retailers that performed the best. Auto sales rose 0.5% after falling 0.4% in April.

Building-material, clothing, grocery stores and pharmacies were among the other retailers that showed gains in demand.